E-mail marketing? Yes, please!

Sending a newsletter to contact list - E-mail marketing conceptNowadays, getting in touch with consumers can be done throughout multiple channels and in different arenas, however, the focus of this post is on the effectiveness of e-mails in the hotel industry. As one understands, at this stage, the interaction between the hotel and the customers takes place in the digital arena.

As stated in the book written by (Peelen & Beltman, 2013), when it comes to e-mails, the focus needs to be on efficient and effective dialogue between the two parts. Moreover, when looking at the financial situation, the advantage of outbound e-mails is that there are low-production costs and virtually there are no shipping costs. The authors also mention that the marketers have the potential to tailor the e-mail according to the preferences of the consumer which ultimately will lead to a direct response.

According to (Trivago, 2017), e-mail marketing is supposed to deliver the highest ROI, no matter the industry. The process offers the marketers a remarkable method to extend the brand’s name and to personalise the guests’ experiences. The most important thing which needs to be paid attention to is that an effective hotel email marketing starts right after the consumer has booked and the relationship needs to last after the consumers have checked out (Trivago, 2017). What is important to highlight is that the “period between when guests book and when they arrive is critical for their overall experience” (Trivago, 2017). That is why hotels should send out “welcoming emails” with general information about the hotel, but also with information about the city and the area the hotel is situated in. A hotel which follows this example is Harvey’s Point in Ireland. As stated by Deirdre McGlone, the owner of the hotel, the pre-arrival e-mails give the perfect opportunity to find out valuable information with regards to dinner reservations or the arrival times of guests (Trivago, 2017).

Personalisation is another important factor which needs to be taken into consideration when a hotel sends out emails. According to (Myers, 2017), personalisation provides a better connection between the hotel and the customer, reduces the fear (especially when it comes to spam emails), provides trust and shows effort. The same fact is mentioned in the article written by (Del Rowe, 2016); the author explains that the marketers “need to understand the customers’ past behaviour and use that knowledge to speak to them in a relevant fashion”. For example, Best Western started using the geo-targeting method in order to send consumers specific and relevant data based on their locations. By choosing to use this method, they immediately noticed a 10% increase in email click-through rates by the non-rewards members (Gilliland, 2017).

All in all, the email marketing strategy should not be easily dismissed as it helps any kind of industry to build up their relations with the past, current or future customers.

Bibliography

Peelen, E., & Beltman, R. (2013). Customer relationship management. Harlow: Pearson Education

3 Reasons Why Email Marketing is Essential for Your Hotel. (2017, January 4). Retrieved from Trivago: http://hotelmanager-blog.trivago.com/3-benefits-of-hotel-email-marketing/

Del Rowe, S. (2016, September). E-Mail Marketing Best Practices. CRM Magazine, pp. 26-29.

Gilliland, N. (2017, July 7). How six travel & hospitality brands use personalisation to enhance the customer experience. Retrieved from Econsultancy: https://econsultancy.com/blog/69207-how-six-travel-hospitality-brands-use-personalisation-to-enhance-the-customer-experience

Interview with Award-Winning Hotelier and Owner of Harvey’s Point, Deirdre McGlone. (2016, November 28). Retrieved from Trivago: http://hotelmanager-blog.trivago.com/3-benefits-of-hotel-email-marketing/

Myers, K. (2017). 5 Reasons Why Personalizing An Email Is Important. Retrieved from Online Income Teacher: http://onlineincometeacher.com/business-tips/5-reasons-why-personalizing-an-email-is-important/

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Segmentation and the CHAID technique go hand in hand in the hotel industry

Business intelligence using modern technologyAccording to (Solis, 2010), one important feature which the hotels need to put emphasis on is the customer segmentation. By choosing to do so, they will focus on a specific target group or segment and eventually the hotel will be able to penetrate the non-traditional market. Thus, it can be said that the segmentation criteria need to be used in order to divide the market (Solis, 2010). What is very important for the reader to know is that at the time or point when the segmentation is being made, the profile of the consumer is not yet identified. That is why, the objective of the tactical segmentation is to provide information with regards to the specific target groups (Peelen & Beltman, 2013).

The most used techniques which are effective and attract lots of attention are the Recency Frequency Monetary Value (RFM), the Chi-square Automated Interaction Detection (CHAID), and Classification and Regression Trees (CART). Even though all three techniques are praised to be very good for market segmentation, CHAID is supposed to be one of the most popular ones in the sub-discipline of marketing. As it can be understood, the focus of this post will be on the CHAID technique and on the process of categorisation.

As mentioned by Peelen & Beltman (2013), a CHAID analysis produces a tree-diagram which is used for discovering relationships between various variables. The same analysis produces categorisation within the same group until no significant information can be extracted (Marley, 2017). The CHAID analysis is very important as it allows useful segmentation variables for “tourism markets to be included such as gender, age, household income, nationality, season and category of establishment” (Díaz-Pérez & Bethencourt-Cejas, 2016).

By understanding how different groups of customers might respond to a specific campaign, this saves marketers valuable time, as they are then able to produce or introduce a marketing campaign which is suitable for that target market. According to (Díaz-Pérez & Bethencourt-Cejas, 2016), the CHAID analysis has been used in the tourism industry with different purposes: either “to identify the preferences when choosing hotel establishments, using demographic variables, or to clarify the preferences in the choice of hotels and restaurants or to describe expenditure habits” (Díaz-Pérez & Bethencourt-Cejas, 2016). In this case, the hotel industry will then know which is the target group/niche market they should pay attention to after conducting such analysis. Not only will they gain important information and tailor their services, but also the customers will understand how valuable they are for the hotel.

Undoubtedly, it can be said that the CHAID analysis is far more superior than the other segmentation methods as it offers more precise and correct information with regards to the possible/future target markets.

Bibliography

Díaz-Pérez, F. M., & Bethencourt-Cejas, M. (2016). CHAID algorithm as an appropriate analytical method for tourism market segmentation. Journal of Destination Marketing & Management, 275-282.

Marley, S. (2017, September 27). CHAID (Chi-square Automatic Interaction Detector). Retrieved from Select (Statistical Services): https://select-statistics.co.uk/blog/chaid-chi-square-automatic-interaction-detector/

Peelen, E., & Beltman, R. (2013). Customer relationship management. Harlow: Pearson Education

Solis, M. (2010). Hospitality Market Segmentation. Retrieved September 28, 2017, from    http://www.hsmai.org/knowledge/summary.cfm?ItemNumber=4640

Mass-customisation can make a change in the hotel industry

pexels-photo-96444Nowadays, mass customisation is more wanted due to the fact that the customer is able to provide unique and valuable information with regards to a certain industry (Peelen &Beltman, 2013). The data provided will afterwards be used to tailor a service or a product which fits the needs and the wants of consumers. There are four approaches which an organisation can use when trying to implement mass customisation. It needs to be mentioned that all the approaches are correct, however, the idea is to compile the right mix with the right circumstances in order to create a better version of a product.

The first approach is called the Cosmetic Customisation and based on the information provided in the Customer Relationship Management book, the product will not change, but its appearance will. This method is useful as the same product will still be on the market just the way it is, but it will be packaged differently. Concerning the hotel industry, this approach is being followed by the simple fact when hotels offer their product in different locations and to different people.

In terms of the Transparent Customisation, the company needs to adapt the product, but not its appearance. In this case, the customers are not able to understand that the organisations change or adapt their product based on consumers’ needs and wants. This approach is particularly good when the consumer’s wishes are predictable. In the hotel industry, a good example which follows this approach is Ritz-Carlton. They developed a less intrusive programme for client’s needs. The hotel would observe the preferences an individual has, store it in the database and use it in order to tailor the perfect service for that customer. In the original article of Gilmore and Pine (1997), it is mentioned that the more a customer stays at Ritz-Carlton, the better the hotel will be able to customise their services in order to fit the consumer’s idea of perfection (Gilmore & Pine, 1997).

Another approach which is taken into consideration by hotels is the Collaborative Customisation. The companies usually engage with every customer in order to know more about the clients’ preferences or their needs. The method is used when the customers find it hard to make up their mind about what they want. A hotel which is following this approach is Hilton. They introduced the Hilton Breakfast Programme featuring a colour-coded system which then informs the customer with regards to the choice of their meals. They motivated this choice of approach by the fact that everyone’s idea of a breakfast is very different.  In this way, the labels will inform the guests of the hotel if the meals they want to eat are low in cholesterol, low-fat, high-fibre, low-calorie, high-energy or if they have any indulgence. Not only will the customers enjoy a “variety of foods and beverages”, but they will get to taste local specialities as well. (Hilton Introduces New Breakfast For Travelers, 2007)

The last strategy which a hotel might approach is the Adaptive Customisation. Regarding this strategy, nor the product nor the presentation changes. Companies which follow this path will usually offer a standard product which can, later on, adapt to everyone’s needs. Therefore, the product will serve different purposes under different circumstances. (Peelen & Beltman, 2013). In the hotel industry, this approach is followed when a hotel wants to offer additional services to their clients.

All in all, as mentioned in the beginning of this post, there is no correct approach or strategy when it comes to mass customisation. The hotels will eventually need to choose the strategy which best fits their vision and mission.

Bibliography

Peelen, E., & Beltman, R. (2013). Customer relationship management. Harlow: Pearson Education

Gilmore, J. H., & Pine, B. J. (1997, January – February). The Four Faces of Mass Customization. Retrieved from Harvard Business Review: https://hbr.org/1997/01/the-four-faces-of-mass-customization

Hilton Introduces New Breakfast For Travelers. (2007, April 30). Retrieved from Hilton: http://news.hilton.com/index.cfm/news/hilton-introduces-new-breakfast-for-travelers?tl=zh-tw

Product leadership strategy works in the hotel industry

pexels-photo-205342According to Treacy and Wiersema (1996) the product leadership, the operational excellence and the customer intimacy are the three strategies which ultimately show why customers decide to be loyal to a certain brand over another.

As Peelen & Beltman (2013) mention in the Customer Relationship Management book, the product leadership strategy is used by organisations which work hard to implement new products as they want to amaze their customers with their newest and best products. The new ideas or services are developed very quickly and they are already introduced to the market. According to Sorescu et all (2011) “such innovations [in the hotel industry] have increased operational efficiency as well as they created more value for customers”.

Although this strategy seems to be risky as one cannot know how exactly the customers will react, these types of organisations need to manage a portfolio of new ideas which ultimately makes them able to foresee obstacles. Also, as mentioned in the book, mistakes are part of the process and are permissible.

The role of the product leaders is to build a mutually beneficial relationship and always customise the way the organisations interact with their customers. Moreover, even the most innovative organisations on the market need to listen to the needs and the wants of their target group, as their aim is to ultimately please their customers. As an example, the product leaders might take into the account to co-create products by asking customers’ opinions; this is the case of the Klaus K Hotel. The boutique hotel located in Helsinki used many co-creative forms in order to redesign their lobby. They called out on all their clients and challenged them to come up with the best design idea. What was very important was the fact that all the entries were accepted – from drawings on cocktail napkins to 3D sketches. In this way, the hotel not only publicly marketed their soon-to-be lobby but also tried to get in touch with the customer and hear the public’s opinion (Co-Creating the Hospitality Experience, 2015).

Another hotel which tried this strategy and was successful is Marriott. Overnight, they allowed their 87 million members of the Marriott Rewards and Starwood Preferred Guest programmes to book rooms and transfer their points. By doing so, Marriott created the best loyalty programme on the market. The hotel chain understood how important is the relationship with their customer. That is why they provide exclusive room rates and even the ability to use points in order to pay for extra activities such as wine tastings or museum tours (Why Marriott Is One Of The Most Innovative Companies Of 2017, 2017).

To sum up, the product leadership strategy is risky and a company should take everything into consideration before applying it. However, successful examples were previously discussed in this post which only makes one think that once the strategy has been thoroughly analysed and all the disadvantages are taken into consideration, only then the organisations will master it.

Bibliography:

Co-Creating the Hospitality Experience. (2015). Retrieved September 13, 2017, from The CoCreators: http://www.thecocreators.com/co-creating-the-hospitality-experience/

Treacy, M. and Wiersema, F. (1996) The Discipline of Market Leaders, New York: HarperCollins

Peelen, E., & Beltman, R. (2013). Customer relationship management. Harlow: Pearson Education

Prakash K. Chathoth, Gerardo R. Ungson, Robert J. Harrington, Eric S.W. Chan, (2016) “Cocreation and higher order customer engagement in hospitality and tourism services: A critical review”, International Journal of Contemporary Hospitality Management, Vol. 28 Issue: 2, pp.222-245, https://doi.org/10.1108/IJCHM-10-2014-0526

Sorescu, A., Frambach, R.T., Singh, J., Rangaswamy, A. and Bridges, C. (2011), “Innovations in retail business models”, Journal of Retailing, Vol. 87, pp. S3-S16.

Why Marriott Is One Of The Most Innovative Companies Of 2017. (2017, March 08). Retrieved September 13, 2017, from https://www.fastcompany.com/3067493/why-marriott-is-one-of-the-most-innovative-companies-of-2017