Mr. King

Sales & Marketing

Applying Best Practices from Other Industries to Travel & Hospitality

By Robert King, General Manager, Travel & Hospitality, ClickSquared

While we travel and hospitality marketers can be highly innovative, most would readily concede that we don’t have a monopoly on good ideas. Once in a while, it is important to raise our head and look beyond our current practices to learn from marketing innovators in other industries. After all, we’re all seeking to build customer satisfaction and engagement – and create revenue – whether the end-customer is a traveler, a banking customer, a donor, or an avid sports fan.

To that end, what follows is a sampling of novel marketing approaches from the financial services, sports and entertainment, and non-profit sectors, respectively, which can offer the hospitality marketer some good food for thought.

Banking on it

While cross-channel direct marketing is not a typical customer acquisition approach for the retail banking industry, it definitely plays a big role in how banks share operational information with customers, and how they enhance customer relationships.

While customers may initiate a banking relationship based on one product, the goal of the financial services marketer is focused on growing that relationship to include the widest range of banking products and services. They want the checking account and the savings account, CDs, investments and the mortgage. To accomplish this, banks frequently utilize personalized, highly choreographed, triggered marketing campaigns. These automated campaigns are activated by a customer’s action (or inaction) following a particular event or transaction. Has a customer been issued a debit/credit card from the bank? Have they activated it? Once the card is activated, how often is the customer using it? Have they used it at all? Based on this usage, what is the next best product to offer? Triggered, automated campaigns allow them to improve and expand their insight, and thus their customer relationships: their marketing programs anticipate their customers’ needs.

Financial service marketers will often use direct mail to engage with a customer and gather more information. The majority of banking customers use online banking, so it is critical that banks grow and maintain their customer email list for both operational messaging and for communicating new offers and services. However, there are still “legacy” customers for whom banks either don’t have email addresses, or, the email address is no longer active. Banks have found that using direct mail is an effective way to gather updated email and preference information so the banks can effectively communicate with these customers.

Financial institutions are also diligent about marketing database “hygiene.” If there’s been no response from a customer for three months, despite multiple efforts, a bank will often remove the customer from its campaign database. By removing unresponsive customers (or email addresses that have “hard” bounced) you improve the results of your programs, avoid potential spam issues that can adversely impact your marketing reputation, and keep costs down. The smaller and cleaner your list, the less you’ll pay for distributing to bad addresses and inactive customers.

One major northeast bank with significant growth objectives wanted to develop a year-end campaign designed to increase “stickiness” within its broad customer base. They focused on customer debit card usage ( a key profitability driver) which is linked to a free cash-rewards program as a means to enhance customer retention.

Unlike past email programs, this year-end program presented unique challenges for the bank. Customers would be experiencing seasonal holiday overload in their email inboxes. The bank was also seeing a rising unsubscribe rate, as well as decreased interest, in every email outreach. These challenges, along with the concerns every bank must deal with in communication (compliance, legal issues, privacy, and risk), signaled the need for a different approach.

After careful research, the bank segmented their database into four key target groups based on the previous year’s holiday spending. The team created highly customized approaches for each spending category, with communications differing in tone, content and appearance.

The segmented results produced a 2 point increase in the open rate and a 40% reduction in unsubscribes, with substantial lift on the program –a huge win for the marketing team. As a result of this new targeting and tailoring, the holiday season was a merry one.

To recap, some of the best practices from the financial services industry that can be applied to travel and hospitality include:

1. Focus on keeping and enhancing customer relationships, not just winning them.
2. Leverage direct mail if and when appropriate to bring offline customers back into the fold.
3. Keep a scrubbed and updated customer database and review it regularly.
4. Be relentless about targeting – listen to what the data is telling you.

Winning Fans

Fans of professional sports teams are markedly different than a banking customer. Banking customers usually stay with their bank for a long time -- so the focus is continued up-selling and cross-selling of services. But sports fans can be fickle. Based on their team’s win-loss record, it can be a struggle to keep their attention (if not their allegiance) – and ultimately fill the seats. Throw in a troubled economy and the intense competition for the entertainment dollar, and the sports-team marketer’s task can be daunting indeed. As a result, sports franchises are intensely focused on collecting fan data: star-player preferences, fan birthdays, ticket-purchasing preferences, favorite opponents, and more. After this data is obtained, franchises are utilizing this information to communicate with fans using highly relevant cross-channel marketing.

Of course, getting fans to give you this information can be a challenge. Here’s where sports franchises have been innovative. Many teams are leveraging social media as a key means to reach sports fans and gather these keener insights. Whether it’s a game hosted on a team’s Facebook page (that requires sharing basic information to play), or forums that encourage the sharing of fan-generated content, fans are responding. One NBA team was grappling with how to engage fans continually in an exciting and relevant way. To help accomplish this, they overhauled their marketing database and determined customer value (a “P&L” for every fan) to help prioritize and target their marketing focus.

This team developed the first interactive Facebook application by a sports franchise, enabling them to connect the fans with their team in a unique way. In order to play the game, fans had to register using their email address. The game proved to be a great tool to engage fans in a fun way, and the registrations increased the size of their email marketing database by over 25% in the first year. The team took this basic contact data, merged it with third party demographic information, and was able to expand their fan database. Next, to further engage fans and deepen the experience, they launched an application that enabled fans to share their most cherished team-moments with family and friends, using text, photos and video -- directly on team’s website. Fans posted their remembrances, and were then invited to vote for their favorite submissions. This application has generated more than 1,000 submissions to date, with close to 3,000 people participating and being added to the fan database -- an important factor in an industry that sells nearly 100% of its tickets on-line, and where over 85% of those sales are in response to an email. Results? Online ticket purchases were up by 10% YOY this past season, as well as merchandise sales.

Some key takes from the sports and entertainment industry include:

1. Collect customer preferences whenever you can.
2. Use the information your customer has already given you to create relevant communications based on their likes and dislikes.
3. Leverage social media in innovative ways to continue gather more information on your customers. Let your customers tell their story!

The Gift that Keeps on Giving

Non-profits and associations been fairly late in entering the digital game, and face some significant challenges. First, their audience/donor base tends to be older, and slower to adopt email. As a result, Non-Profits continue to rely heavily on direct mail, both as a means to increase brand awareness and also to collect email addresses. This simple but tried and true method has allowed many organizations to significantly increase their email databases and ramp up their email communications commensurately. By doing this, they have been able to engage an older population via a new medium, while also engaging a younger population that strongly prefers email over alternate communications channels.

Second, Non-profits collect information about their audience in very diverse ways. The walks, charity events, and numerous other ways volunteers get involved with charitable organizations means a significant amount of contact takes place off-line -- which often leads to donor data being scattered across the organization. Without consolidated data, these organizations have a hard time getting an accurate read on their donors: their demographics, preferences, how often they’ve donated, etc. With this fragmented view, communicating with supporters in a relevant, targeted way is difficult and haphazard. As a result, a top priority for a Non-profit is to consolidate this information and create a multidimensional view of donors. Once this is accomplished, targeted messages and coordinated campaigns can be developed.

Associations, along with having to worry about donations, also must focus on members: how many they have, how many they’ve added, and how many members renew from year to year. They are continually looking for ways to increase non-dues revenues, essentially “cross-selling” membership benefits, such as conference attendance, literature, or registration for webinars.

One association created an “engagement score” to help measure member involvement, and create communication programs to stimulate a member’s specific activity, broaden his activities, or both. For example, members with a low engagement score receive communications reminding them of the benefits of membership, the best ways to get involved, and how to get the most from their membership. On the other hand, “engaged” members receive communications asking them to refer friends and colleagues to help increase membership. These programs have resulted in reduced member attrition, along with increased non-membership revenue.

While we’ve heard these themes before, I think they’re worth repeating:

1. Direct mail can be useful – use it to your advantage. It’s may be the perfect way to move your audience from one channel to another.
2. Consolidate your data – whether it’s from an email campaign, a sign-up sheet, direct mail campaign, the website, or an outdoor event.
3. Measure how engaged your customers are with your organization and use that information to create marketing programs that are relevant to those members.

A Few Parting Words…

When Southwest Airlines wanted to improve its aircraft turnaround times at the gate (already the fastest in the industry), if famously benchmarked itself against Indy Pit Crews to generate breakthrough ideas. Often, taking a look at how other industries are addressing their marketing challenges can spur new thinking. Hopefully, examining these few success stories from the financial services, sports and non-profit sectors and thoughtfully applying the “key takes” will help fuel your marketing creativity.

With more than 20 years of experience in the travel and hospitality industry, Robert King has held marketing, sales and senior management positions at a variety of organizations. Mr. King works with ClickSquared clients throughout North America, Asia and Europe to develop and implement highly targeted, timely, interactive customer relationship programs that result in increased ROI. Mr. King can be contacted at 480-603-9403 or bking@clicksquared.com Extended Bio...

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