Retail and Hospitality: Meet Me In the Lobby, The Stealth CRM Connection - By Michael Squires
Retail and the hotel business are getting together. The development trend in the hospitality industry is toward more mixed-use properties. Mixed-use hotels are the ones with a big familiar flag in front, like Hilton or Marriott, and a collection of retail stores or franchised restaurants in the lobby.
The main reason customers walk into a lobby store is because they are staying at the hotel, and most hotel guests are on property because of advertising, past experience or -- stealth CRM. The hotel business has been doing limited CRM for 20 years under the name 'guest history.' The first guest history system was rolled out by Ritz Carlton in the early 1980s to track guest preferences for things like smoking/non-smoking, pillow choice, and (this is the most important part) guest revenue information. If you stayed at the Ritz Atlanta frequently, every time you walked into the hotel they put you on the right floor with the correct pillow; sometimes you even got a birthday card and fruit basket. It was great. The only problem back then was that if you made a reservation at the Ritz St. Louis they had to start from scratch to get you into that hotel's system.
Technology has evolved from standalone systems to networks, and today you can check into almost any Ritz in the world and receive your fruit basket and card on the right day. When it is done right hotel CRM is like a good magician; you are delighted by what you see and wonder, "How did they do that?"
Hotels know that it costs less to keep a guest coming back than to attract a new one, so they are doing all they can with technology to assess the lifetime guest value and target the most valuable people with promotions, incentives, and bigger birthday cards. Whether CRM is used to make guests feel special or to better market to them, the results are the same: guest loyalty and repeat business.
Now that more retail stores are opening in the public areas of hotels it is important for those storeowners to understand how the hospitality industry is using CRM to bring the right kind of customers to their store. After all, qualified customers are what retail operators are paying for in a lobby location.
Upscale flags like Ritz, Marriott, and Wyndham, as well as top hotel operators like Destination Resorts, are all collecting huge amounts of guest information to develop a clear idea of what their most valuable guests like and how they spend their money. Most large chains have a record of every purchase a guest has ever made at any of their properties. Hotels not only know where you sleep and how much you spend, they keep a record of your total food and beverage consumption history and even track whether you drink or not. Recently at one big San Francisco convention hotel the reservation sales team had to choose between a large religious group and a slightly smaller party of technology professionals that wanted sleeping rooms for the same dates. The property could not take both. CRM showed that the religious group spent very little at the hotel for meals and alcohol in the past, but that the tech group, although smaller, always ate in the hotel's restaurant and drank heavily in the bar, making them more valuable to the hotel. Stealth CRM made the business decision simple. It was the technology professionals that went shopping at the stores in the hotel's atrium.
Hotel CRM and Store Location
Whether you want to attract high rolling jewelry buyers to your store in a Las Vegas casino hotel; or well-paid female business professionals to your clothing boutique in the lobby of the Adams Mark Nashville, you need to carefully evaluate the type of travelers a hotel targets with its marketing. If you are thinking about opening a hotel outlet, check if the property's CRM system can answer questions about guests' average income and economic profile. Many chains cannot access this information, and are less effective in attracting your prospective clients. Also, verify the past year's occupancy at the property - how often they sell out -- and the average daily rate paid by guests. These criteria strongly affect the volume and quality of lobby traffic. Hyatt guests will obviously spend differently than Days Inn clientele. If you do your research thoroughly, the right hotel can be magnet for qualified customers and handsome profits.