Dynamics in marketing and communications are quite often ignored in the usual communication methods applied in the majority of hotels. Within the field of customer engagement management in the hotel industry, it is important for the hotels to understand the changing need for marketing communication throughout the different phases of the customer relationship.
As mentioned in my first blog about the importance for hotels to opt for a more defensive strategy, increasing the customer retention rates in hotels by 5% increases profits by 25% – 95%. (Harvard Business School, 2000) However reality still shows that marketing budgets assigned to attracting new customers are still on average 5 times bigger than the part spend on current customers. (Pelsmacker, Geuens, & Bergh, 2013) Therefore the simple conclusion would be to assign a more significant share of the marketing budget to the retention of already existing customers. In reality however, this is slightly more challenging.
Marketers in the hotel industry have to understand that relationships have to develop in interactions. They develop throughout the four different phases of the relationship lifecycle model. (Peelen & Beltman, 2013) By using the relationship lifecycle model in their relationship policy, hotels can more efficiently achieve customer retention. This can be done by adapting communication to the different phases. The phase of the relationship determines the measures, which should be used for successful retention. (Georgi, 2005) Within the marketing communication of hotels, three main aspects can be communicated with the help of marketing campaigns: emotions, offers and information. (Heiden, 2014)
During the exploratory phase the hotel should be focused on two-way communication. Hotel marketers must stimulate the customer for any future transactions. Differentiation and the exchange of information are important in the first phase and furthermore the hotel management has to carefully note the customer satisfaction and adapt to any negativities. (Peelen & Beltman, 2013) Hotel brands such as Outrigger are using Live Chat to engage with their customers in the first phase of the relation. Customers and hotels find it extremely convenient to be able to communicate directly and start the relationship before the first purchase. (Parsippany, 2017)
The objective of the second phase, the growth phase, is to increase commitment to avoid negative development of the relationship. Hotel should demonstrate their appeal and uniqueness through their communication. According to Peelen and Beltman, customers are less likely to terminate the relationship when they bought more than one product or service. Hotels can use this theory by offering extra products (cross-selling) such as activities or a bottle of champagne. (Hotelierfocus, 2012) Communication should be interactive and hotel marketers should offer quality customised experiences.
In the maturity phase commitment is at its highest. After many repeat stays of the customer, the need for further information has decreased. The customer is familiar with the hotel and transactions are stable. In this third phase of the relationship it is important for hotels to express their appreciation for the relationship. This means that the content of communication gets more emotional. An example of this can be when hotel start taking event in customers’ lives into account, so called life events.
In the decline phase the relationship faces a possible end. When this is due to external causes, not much can be done. However hotels are, in this phase, able to contact customers to steer the development of the relation back in a positive direction when the cause is a bad experience with the hotel itself. Personal attention and involvement from the hotel are at its highest.
It can be concluded that the longer the customer relationship, the lower is the need for information about the product or service. However, the longer the customer relationship, the higher the need for emotional content in communication. Therefore hotel guests have a changing need for communication throughout the relationship lifecycle.
Harvard Business School. (2000). The Economics of E-Loyalty.
Heiden, S. M. (2014). A NEW COMMUNICATION APPROACH FOR THE HOTEL INDUSTRY. JOURNAL OF INTERDISC IPLINARY RESEARCH.
Parsippany, N. J. (2017, May 22). Top 5 Reasons Live Chat is a Must for Hotel Websites. Retrieved from Hotel Online: https://www.hotel-online.com/press_releases/release/top-5-reasons-live-chat-is-a-must-for-hotel-websites
Peelen, E., & Beltman, R. (2013). Customer Engagement Management. Pearson.
Pelsmacker, P. d., Geuens, M., & Bergh, J. v. (2013). Marketing Communications – A European Perspective. Pearson Education Limited.