Mr. Morse

Sales & Marketing

Best Practices in Email Marketing

By Steve Morse, General Manager, Travel & Hospitality, ClickSquared

One of the things that hospitality marketers got "right" before many other industries is the practice of maintaining wonderfully detailed customer records and databases. The problem, however, is many hospitality marketers still haven't learned to use email marketing to its full capacity and they continue to rely primarily on ad hoc email campaigns and direct mail to reach their audiences. By doing so, they completely fail to use the great data they have while it's still fresh, leading to disappointing results. To succeed in today's environment, hospitality companies must do a better job of putting their data to work in real-time, delivering messages that are timely and personally relevant to the recipient. The good news is these programs are far easier to achieve than most people think due to advances in technology and online communicability.

With the growth of the online channel, email has become the central nervous system for driving interactive customer relationship marketing. It enables a current and relevant flow of information between a company and its customers, with an ability to react quickly to changes in customer data and behavior, and spur parties to action when appropriate. Effective email marketing relies on a constant data feed for successful communication and outcome. But how can marketers best leverage this channel? And more importantly, how can they do it in a way that is efficient and cost-effective?

Driving Costs Down and Customer Engagement Up

Fortunately, communicating effectively with customers doesn't mean breaking the bank. As most marketers have come to realize, email marketing is a great way to keep costs down, while still allowing you to communicate with your customers on a regular basis. While the cost of traditional direct mail continues to increase, email provides a low-cost alternative with near infinite scaling capabilities.

In addition to the cost savings, email serves as the timeliest way to reach the majority of consumers and allows for instant results. Instead of marketers waiting for a response from a mailer, email provides immediate feedback on the effectiveness of your messages. This makes it easy for hospitality marketers to send compelling, personalized messages that engage guests and prospects and allows them to immediately access and act upon the email before the window of opportunity has closed.

Email marketing also provides hospitality marketers a way to easily segment and test communications in real-time based on inbound response rates. Marketers can easily analyze how people respond and quickly create small test programs that develop into larger campaigns based on the success of those initial trial communications. Minor tweaks and/or adjustments to the existing campaigns allow you to continually narrow your focus and help you communicate to the right people, at the right time.

Who are Your Guests and What Do They Really Want?

The idea behind any good relationship marketing solution--that utilizes email marketing-is to reduce costs while increasing results. But it all starts with identifying those customers who will be most receptive to your offering. The key is learning how to segment customers by behavior, experience, profile, etc. and using that knowledge to create customized, targeted email communications. This can be done in a number of ways but one simple example is through RFM analysis (Recency, Frequency and Monetary). RFM analysis helps determine which customers are most likely to engage profitably based on previous behavior.

Broken down by element, RFM analysis measures the following:

• Timeliness: How recently a customer has engaged with you, or specifically made a purchase?
• Frequency: How often does the customer engage with you? Do they stay and pay regularly?
• Monetary: How much does the customer spend?

The RFM analysis allows the creation of a base value score on everyone in your database. For example, you may have a guest who stays at your hotel 10 times a year but only spends $200 each time he visits, compared to a guest who only stays three times a year but spends $1500 each time. The scoring model helps you segment guests, based on engagement, for future marketing campaigns and determine where you should dedicate marketing dollars for increased ROI.

Taking RFM a step further, advanced hospitality marketers are learning that once a good portion of the business incorporates online behaviors such as online bookings (via their site) and email engagement, there are even richer models that capitalize on real-time interactions. These models take into account each interaction (Web site visit, email reaction, hotel stay, etc.) and immediately update a central marketing database that links directly to a diagnosis of the quality of the engagement triggering an appropriate action (communication, status notice internally, etc) back to the guest.

Listen to What Your Guests Say But, Also Watch What They Do

Driving guests and prospects to a profitable engagement is the next step in a successful relationship marketing program which can be done by analyzing behavior. Effective email communications touch the customer at the right time with appropriate messages based on their actions and preferences. Instead of sending blind offers for on-site spa treatments to guests, marketers can turn to past behavioral data and send customized emails to only those who have booked spa treatments in the past with messaging that is unique to that individual's known preferences. In addition, ads for the spa can be created and delivered to the individual within a customized email.

One way to delve deeper into customer preference is to encourage guests to create personal profiles online. These profiles give guests the opportunity to tell you about themselves and their likes and dislikes. Guests benefit by having their requests attended to prior to checking in, and hospitality marketers gain valuable information that can be used to create future marketing campaigns. By offering this service via the Web site, hospitality marketers can learn a lot about their guests including: what type of pillow they prefer; what magazines they read; what activities or interests they are considering during their trip, etc. Information gleaned from those responses can quickly turn into valuable content for future marketing messages. More importantly it can provide specific guidance for relevant up-sell and cross-sell opportunities to increase revenue.

By creating intelligent business rules within your database, you can identify patterns of behavior and launch automated offers based on customer action or inaction. For example, if someone has booked a stay in your resort every year for the past three years and didn't book this year, this break in the pattern can trigger a communication to let them know they will be missed. A well-timed, customized message that could include a special offer may be enough to have that guest re-engage with you. For high-end guests, a different approach may be appropriate. Rather than sending an email directly to the guest, a message can be triggered and sent to the general manager of the property asking that he or she send a hand-written note to the guest inviting them back.

Communication for the Entire Customer Lifecycle

Customer communication should not be focused solely on first time or frequent guest bookings - rather, monitoring and communicating must take place throughout the entire customer lifecycle for maximum impact. The key element to communicating effectively with customers is to understand where each customer lies within the lifecycle. Timely and relevant marketing messages should begin at the prospect or acquisition phase and continue into the active customer stage, through loyalty and high-engagement. Unfortunately some will move towards inactivity and will require support through retention programs, and even reactivation programs. Once you have the clear understanding of where a customer resides in the lifecycle, you can segment them into smaller groups or communicate to them on a one-on-one basis. Your emails can then be auto-populated with multiple dynamic pieces of content making your message or offer unique to each customer. If you are using several disparate databases it will be important to integrate your data before building your email marketing campaigns. Even many of today's largest hotel chains have numerous pieces of data in various locations that have never been integrated. This makes it very difficult, if not impossible to identify where guests are within the customer lifecycle and how they should be targeted. Consolidating all of your data into a single marketing database will enable you to have a 360-degree view of each customer. You will be able to understand how each customer interacts with you at all of your various touch points. It is this complete view of each customer that will allow you to communicate the right message at the right time. Without data integration, you cannot fully capitalize on the power of your customer data.

Increasing Revenue through Cross-sell and Up-sell Opportunities

With your database in order and your messages on track, what can be done to increase revenue through cross-sell and up-sell opportunities? Historically, resort marketers have had limited opportunities to cross sell and up sell guests - generally occurring during the process of reservation and/or on-site check in. Check-in often represents the second and last opportunity to up-sell or cross-sell, (suite upgrades, golf tee times or spa reservations). Such opportunities to increase revenue are typically limited and imposing- until now.

Prior to a guest's arrival and during their stay much more can be done through text messaging, email offers, etc. A recent study conducted by PhoCusWright reported that at least 30 percent of travelers would like to receive special offers about local restaurants and activities via their mobile devices DURING their trips. Such interactivity via mobile phones is already a common practice in Asia and Europe. This opens a whole new (and largely untapped) area for hospitality marketers to create pre-, during- and post-stay offers to increase revenue as well as guest satisfaction.

For example, three days prior to a guest arriving on property, a highly personalized, automated email or text message can be sent to them. This might include information on their reservation, activities or events that are happening on property or in the city, timely recommendations from the concierge, live weather feeds (so they can pack appropriately for their trip), etc. From there, you can create offers that highlight on-site amenities - "Take advantage of our award-winning golf course during your stay;" "Be sure to make an appointment in our refurbished spa;" "Check out on the local fare at the five-star restaurants in our area."

Measuring Success

No hospitality marketer today should do anything without being able to prove ROI on their campaigns. When developing your campaigns, tools should be put in place on a campaign-by-campaign basis to help you understand the value of each specific program. You should be able to access a 24-hour or real-time update on ROI metrics for each campaign. This timely measurement enables you to predict and analyze success on a day-to-day (or hour-by-hour) basis and gives you the opportunity to edit and revise campaigns for greater effectiveness.

With all of this information at your fingertips you can create marketing programs that are highly profitable and provide the best return on investment. Loyalty doesn't always mean profitability - and you will be able to determine if your loyal guests are your profitable guests.

By implementing timely, relevant and measurable email and electronic marketing campaigns, you can quickly determine the most profitable ways to allocate marketing dollars. This enables you to deliver the information and services your guests crave while increasing marketing ROI at the same time. That's hospitality at its best.

Steve Morse is the General Manager of the Travel and Hospitality vertical at ClickSquared. With more than twelve years of experience in entrepreneurial environments, Steve has a proven track record of helping companies position and grow their solutions increasing retention while decreasing overall costs. In this role, Morse counsels clients on the strategic direction, design and implementation of marketing and communication programs to build long-term relationships with customers. He works closely with ClickSquared’s travel and hospitality clients throughout North America and Europe. Mr. Morse can be contacted at 781-487-7569 or smorse@clicksquared.com Extended Bio...

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