Revenue Management Meets Social Media: Taking advantage of social data and channels
By Kelly McGuire Vice President, Advanced Analytics, Wyndham Destination Network | January 15, 2012
Many companies have tactical social media programs managed by the marketing department, but the industry as a whole has yet to fully exploit the potential of this emerging data and communication resource. The revenue management department, as it takes a more strategic role within the organization, is poised to be an early adopter of the opportunities provide by social media. In this article, I will discuss a framework for evaluating social media-related, revenue management opportunities which can be used in revenue management and across the organization understand the role of social media in supporting better business decisions.
In order to help revenue managers identify and take advantage of social media data and channels, I will first define social media, discuss the types of data that are available through social media channels and describe the emerging analytic techniques that will turn that data into meaningful, actionable information. Then I will present a framework that will help revenue managers take advantage of opportunities to leverage social media in their decision making.
Social media is defined as a group of internet-based applications that allow the creation and exchange of user-generated content(i). These applications are designed to facilitate conversation, allowing the consumer to participate in the development and dissemination of content. Examples include review sites (TripAdvisor and Yelp), news sites (Digg), social sharing (Flikr, YouTube), social bookmarking (Delicious, Faves) and purchase/review sites (Amazon, Travelocity). There is a myriad of these types of applications. Conversations about your brand are taking place in many languages across the globe. While this can be intimidating, it also represents a huge opportunity.
These sites generate volumes of unstructured text data, but they also contain images, video and audio. Basic quantitative data like number of reviews, number of fans, number of friends or followers or aggregate consumer ratings is also available. Demographic information can be mined either through site-mandated entry (age range, gender, purpose of travel, location) or through the comments themselves (my wife ordered the fish; we don't have a place like this in Chicago). Finally, the connections among users within the networks and the impact of their activity can provide a valuable source of information to help identify the most influential participants.
Analyze and act on intelligence gleaned from online conversations
There are three basic categories of social media analytics: descriptive statistics, social network analysis and text analysis. Descriptive statistics provide a snapshot of historical and current performance. They answer questions like, how many fans do I have? How many reviews have been posted over the last six months? What is my average rating on each of the Online Travel Agents (OTA)? Social network analysis (SNA) is an advanced analytic technique that uses the connections among users, and the impact of their activity, to determine the degree of influence each participant has within these social networks, and who they are influencing. Once you have this information, targeted marketing efforts can be directed at the most influential users such that they spread your message for you. For example, you could use SNA to identify the influencers in a cruise community and invite them to preview a new ship or a new itinerary with the hopes that they will rave about it within their community.