The importance of data for cross-selling in the hospitality industry

According to Peelen and Beltman (2013), cross-selling is the sales of a product or service to current customers who are already purchasing one or more products from a particular company. Different forms of cross-selling are identified, such as when customers buy one or more products during a contact, when customers buy a second or third product during a later contact, when customers buy another product within the same product range, or when customers expand the product they already bought by buying a product from another category. In the hospitality industry, cross-selling occurs when hotels sell their guests in-house services and products for example.

However, hotels are not very successful yet in cross-selling their guests services and products. According to research done by Travel Tripper, only 3% of the hotel guests book add-ons during their online booking process. On top of that, when customers are presented with too many options on products and services they can additionally book beside their hotel room, they might even abandon their entire booking (Lee, 2015). It seems that hotels still have a lot they can gain from cross-selling. So how can hotels successfully cross-sell their products and services to their customers?

The key to a successful cross-selling strategy for hotels is being there at the right place and at the right time for their guests. First, when looking at timing for cross-selling, customers are most receptive for cross-selling when they are in the phase of ‘pre-trip buzz’. When approaching customers during this phase, it is more likely that they purchase additional services or products from the hotel. Approaching customers can be done by sending them an email with offers (Lee, 2015).

However, the perfect timing will not immediately make cross-selling very successful for hotels. On top of that, it is vital for hotels that they appeal to their customers’ appeal to buy. This can only be done with offers that really speak to the customer; the offers need to compliment their original purchase and the offers need to fit the customer’s individual preferences. In order for hotels to be able to offer their customers personal offers, they need to know their customers. Hotels can only get to know their customers if they use data. Data will help hotels to get an insight into what their customers want (Subramanian, 2013).

So when hotels want to cross-sell products or services to their customers, it is crucial that their offers are well-timed and personalized. It is impossible for hotels to do this without analysing and using data.

 

Bibliography

Lee, J. (2015, August 10). Upselling & Cross-selling: The difference and why it matters. Retrieved October 02, 2016, from http://www.traveltripper.com/blog/upselling-and-cross-selling-the-difference-and-why-it-matters-for-hotels/

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (2nd edition).

Subramanian, R. (2013, March 8). Tips for Using Big Data to Optimize Upsell and Cross-Sell Strategies. Retrieved October 2, 2016, from http://www.mytotalretail.com/article/big-data-can-grow-your-retail-business-upsell-cross-sell-strategies/all/

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How Marriott uses virtual reality to engage their customers in their online brand community

Virtual reality makes it possible for people to explore computer generated virtual environments and to also interact in those environments by only using a headset. The virtual reality technology artificially creates sensory experiences, which make it seem that as if that person is really present in that environment (Virtual Reality Society, 2016). Virtual reality technology’s popularity is expanding and its potential for marketing is also getting recognized increasingly. Since the travel industry is all about selling experiences, virtual reality can be particularly influential.

Even though it is very likely that virtual reality headsets will be as essential to people in the future as smartphones are now, businesses are still struggling on how to use virtual reality to their advantage in their marketing. When looking at how brands in the travel industry implement virtual reality in their marketing strategies, one hotel brand in particular stands out.

In collaboration with Samsung Gear VR, Marriott has launched several virtual reality initiatives. Their Teleporter program in 2014 was a pilot where they used virtual reality so that people could experience their hotels in Hawaii and London. After that, they launched the VR Postcards. VR Postcards followed travellers on trips to for example Chile, Rwanda, and China, and enables guests to experience those destinations for themselves through a headset. These virtual reality programs can be found on Marriott’s Travel Brilliantly website. This website is an online brand community and co-creation platform where Marriott’s guests can share their ideas that help Marriott to create new experiences (Marriott News Center, 2015).

As Peelen and Beltman (2013) argue, it is very important for brands to provide interesting and engaging content and media that people will connect with and engage in on the social web. Virtual brand communities are a very suitable platform for this; customers can co-construct their own experience, find information, actively debate ideas, provide solutions, and contribute their opinions on these communities (Martínez-López et al., 2016). This is exactly what Marriott does cleverly with their Travel Brilliantly brand community and their virtual reality programs. They make the ‘Marriott experience’ more individual and also easier accessible. Through virtual reality, people will get a better idea about what their holiday experience will be like. These people then share their own personal stories on the Travel Brilliantly platform.

Marriott’s Travel Brilliantly and virtual reality initiatives give Marriott’s customers the opportunity to experience a holiday through virtual reality and to create content with their own perspective to branding experiences. This integration of brand experience and marketing content on their online brand community can be an example for many businesses on how to use virtual reality in the future to engage their customers.

 

Bibliography

EMarketer. (2015, December 31). Marriott’s Virtual Reality Transports Guests ‘Around the World’. Retrieved October 9, 2016, from http://www.emarketer.com/Article/Marriotts-Virtual-Reality-Transports-Guests-Around-World/1013409

Marriott News Center. (2015, September 9). Marriott Hotels Introduces The First Ever In-Room Virtual Reality Travel Experience. Retrieved October 10, 2016, from http://news.marriott.com/2015/09/marriott-hotels-introduces-the-first-ever-in-room-virtual-reality-travel-experience/

Martínez-López, F. J., Anaya-Sánchez, R., Aguilar-Illescas, R., & Molinillo, S. (2016). Value Creation in Virtual Brand Communities. In Online Brand Communities (pp. 189-205). Springer International Publishing

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (2nd edition).

Virtual Reality Society. (2016). What is Virtual Reality? Retrieved October 9, 2016, from http://www.vrs.org.uk/virtual-reality/what-is-virtual-reality.html

 

Co-creating the perfect experience for hotel guests

 

According to Prahalad and Krishnan (2008), customers base the value a company holds for them on the personal, unique experiences with the products and services that the company provides. When a company has created such a unique experience for its customer, a close and personal relationship arises between that customer and the company; the customer will trust the company and will be less likely replace the company, while the company is able to build up customer knowledge (Peelen & Beltman, 2013).

In order to create a personal and unique experience for the customer that leads to a relationship as described above, the way the customer is being involved with the company is very important. There are several different ways to involve the customer. One of these ways is called co-creation. Co-creation implies that multiple people or parties contribute to creation of a new product or service through an innovative network or platform that is focused on learning and experimentation. Co-creation pays attention to the needs and the desires of the end-users and not to the technology or other parts of the production process (Peelen & Beltman, 2013).

Since the most important thing in the hotel industry is the interaction with the hotel guests, this industry is an ideal environment for co-creation. Hotels that would implement co-creation, could gain a real advantage compared to their competitors. However, the majority of the existing attempts at co-creation in the hotel industry are more forms of marketing combined with customer engagement than actual value co-creation (Gramm, 2015).

There are several examples of hotels that are attempting co-creation. Starwood has its Mariott Travel Brilliantly initiative. This is an online platform that gives guests the opportunity to submit ideas and to vote on other guests’ ideas. However, this is more an online suggestion box than an on-going collaboration with the end-users to create value. Another example of a co-creation attempt is the Klaus K Design Hotel in Helsinki, Finland. They organised a completion in which they invited guests to come up with new ideas to transform their lobby and bar into an information hangout space. This attempt as well is more based on an individual sending in his or her ideas, than on an on-going collaboration (Pieters, 2015).

However, the attempts of hotels described above are not actual co-creation, but more examples of customer relationship management. The hotel industry has to come up with a way in which it is made possible that there is an on-going and productive relationship between the hotel and the end-users. This relationship has to be more than the guest giving suggestions to the hotel; the guest has to be involved in the whole process of creating the ultimate hotel stay. Only then it is possible to create the perfect experience for hotel guests.

 

Bibliography

Gramm, G. (2015, November 5). Value co-creation in hospitality – a transformational challenge. Retrieved September 24, 2016, from http://ehotelier.com/insights/2015/11/05/value-co-creation-in-hospitality-a-transformational-challenge/

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (2nd edition).

Pieters, M. (2015, January 8). Co-creating the Hospitality Experience – TheCoCreators. Retrieved September 24, 2016, from http://www.thecocreators.com/co-creating-the-hospitality-experience/

 

 

The customer intimacy strategy implemented in the hotel industry

Treacy and Wiersema (1996) distinguished three different value disciplines of which companies can choose from to distinguish themselves from their competitors: operational excellence, product leadership, and customer intimacy. Of these three value disciplines, the customer intimacy fits in the best with customer engagement management. Companies that implement the customer intimacy strategy focus on building relationships with their customers. The individual wishes of their customers are the business’ focus of attention and products and services are constantly adjusted to the customers’ needs and wishes (Peelen & Beltman, 2013).

A lot of hotel chains in the hotel industry have chosen to implement customer intimacy into their business strategy. They focus on building relationships with their customers by fulfilling their wishes. They want to turn their customers into life-long guests. But how exactly do hotels implement this strategy into their operations? How do they try to build relationships with their customers and how do hotels go from just selling hotel rooms to meeting the individual customer’s preferences? The answer to these questions might be found by looking at a particular hotel chain.

Ritz Carlton is an excellent example of a hotel chain that implements customer intimacy into its strategy. Because not only do they implement it, they surpass the majority of the hotel chains in the way they revolve their business around their customers. The Ritz Carlton focuses their attention on flawless service standards to separate themselves from other hotels. They argue that it is not possible to build loyalty or a relationship with customers, without a personal or emotional connection. One of the ways Ritz Carlton does this is by meeting the ‘unexpressed’ wishes of their customers. Employees of the hotel chain carry notepads with them where they write down expressed and unexpressed needs of their customers. They then try and surprise these customers. Fulfilling these expressed and unexpressed needs is done in different ways: a business man who stays at the hotel for four weeks gets special business cards with the his name, address of the hotel and telephone number to give out during his stay, but also a child that forgot his stuffed animal at the hotel gets its sent back to him together with a photo album with pictures of the stuffed animal sitting by the pool and the beach, only because his parents told the boy that his animal was enjoying the vacation a little bit longer. These customers will never forget about their experience with Ritz Carlton and feel a personal connection with the hotel (Robertson, 2015).

Ritz Carlton shows that the hotel industry is about so much more than just selling hotel rooms to customers; it is about creating unique, memorable, and personal memories for customers. This is the only way to create a personal connection with the customer and to build a lasting relationship with them.

 

Bibliography

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (2nd edition).

Robertson, G. (2015, May 29). How Ritz-Carlton meets the “unexpressed” needs of consumers. Retrieved September 18, 2016, from http://beloved-brands.com/2015/05/29/ritz/