Straight from the USA, customer relationship management is a new concept designed to make hotel guests feel more valued than ever before. Bob Gledhill reports on the latest technological tool to hit UK shores.
The world of information technology (IT) is awash with abbreviations, many of them originating in the United States of America (USA). One which has begun to gather momentum in the United Kingdom (UK) is CRM (customer relationship management).
Software is being developed which enables a hotel to make a returning guest feel well-remembered and more valued. It does this by storing a guest preference history and having immediate access to it when a repeat booking is enquired about or a direct mail-shot is being prepared.
In simple terms, CRM is a means of recording a guest's history and preferences. It might note, for instance, that he or she requested a first-floor non-smoking bedroom and was happy with room 101, ordered a copy of The Times to be left outside the door, wanted a quiet table for one in the restaurant, and needed a room with a modem link. More importantly, CRM also remembers the rate that the guest was charged.
There are two ways in which this system can work to the benefit of the hotel.
The first of these comes in when a former guest rings with a reservation enquiry and, as soon as their name goes into the computer in telesales, their guest history is displayed so that the sales person can talk to the enquirer as a "friend" of the hotel chain. The enquirer is then asked: "Would you like a first floor-room again, a copy of The Times, a quiet table in the restaurant, and we can do you the same super deal on room rate as before?" Ideally, the impressed guest confirms the booking, feeling valued.
It is tempting to think that customer cynicism could edge in if the hotel sales team appeared to know too much about the guest's history. However, an American Express frequent guest survey showed that almost 70% of guests would like a customised reservation.
In the UK, several hotel groups have adopted the concept, including Whitbread's Marriott hotels, which now link their CRM technology into the company loyalty scheme. At present, guest histories are held by each individual hotel, but Whitbread is keen to develop a CRM system which allows all its UK hotels to access each other's guest histories.
For Whitbread, the opportunities for direct marketing are huge, as hotel systems manager Kate Roberts explains. "We take an extract from everyone who has stayed with us, which we put into our central database," she says. "For example, we can see how many couples stayed with us on Valentine's Night, whether they went into the restaurant and what they spent. So when we are planning Valentine's Night promotions next year, we direct-mail them on the next promotion."
However, the Holy Grail of CRM for the international chains, and the second way it can benefit them, is that guest information history is accessible globally to room sales staff. It is in this area that the US-based Carlson hotel chain, whose best-known brand in the UK is Radisson, is powering ahead. Carlson has chosen CRM as a key direction in sales and marketing. Where it differs from other international hotel brands on the future of CRM is that, while many see it as a development from customer loyalty schemes, Carlson does not.
Dick Dunn, vice-president of the Carlson Marketing Group, has this blunt warning: "We think only 11% of active members in a loyalty scheme are actually loyal as we like to think of the meaning. Loyalty schemes are a many-to-one marketing approach, rather than a one-to-one approach. Building relationships with one customer at a time is not just about more rewards."
Customer management software systems are a new concept in Britain but they are increasingly being offered by UK software suppliers. For more information, turn to the Caterer & Hotelkeeper Technology Directory on the following pages.