White Paper

CRM and social media

How a blended approach means good business in the hospitality industry

Executive summary.
Social media has become a common platform for reputation management, social servicing of customers, and outbound marketing. It is rare, however, for hotels to combine social media with a solid CRM delivery strategy, even though the combination can be a powerful one to wow guests and prospects, build business, and gain more loyal guests. This white paper proposes viewing social media as a highly targeted delivery channel within an overall CRM effort. It offers guidelines on how to blend social media with CRM and real-time marketing strategies for a new level of marketingsocial CRMthat delivers greater return on your investment than ever before.

Table of Contents
1 2 Executive summary. Reputation management is a great start. Serving the social customer. Taking marketing messages to social media platforms. Social CRM as business strategy. Make it relevant. Coordination before collaboration. Consider Infor. Get started today.

Reputation management is a great start.

In business, the story of musician Dave Carroll and the viral effect of social media on United Airlines brand is near-legendary. Carroll wrote a song titled United Breaks Guitars and posted it on YouTube after United Airlines damaged his guitar on a flight. The video clip instantly gained millions of viewers. Carrolls music career took off. Having learned a valuable lesson, United wisely saw the videos value and began using it as an internal training tool on customer service. Anecdotes like these illustrate the power of social media today. So do statistics. Social networks and blogs reach nearly 80 percent of active US Internet users and represent the majority of Americans time online.1 What about the hospitality industry? As recently as 2008, social media was regarded as a fad by many hoteliers. How things have changed in just a few years! In a 2010 study by the Hospitality Sales and Marketing Association International (HSMAI) and VIZERGY, nearly 70% of US hoteliers said that online marketing (social medias cousin) was the marketing channel with the greatest ROI; 60% had implemented a social media marketing strategy as part of their efforts to reach and influence potential customers online.2

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1 Nielsen, State of the Media: Social Media Report, Q3 2011, p. 2. 2 Social Media Optimization, Hotel Industry Leading in Social Media Marketing, Aug. 16, 2010, http://social-media-optimization.com/2010/08/hotel-industry-leading-in-social-media-marketing/.

According to that report, however, the social media marketing strategy of many hoteliers wasnt as comprehensive as it could have been. Much of their activity involved encouraging guests to post reviews and monitoring guest reviews at least once a week. This is an extremely common use of social media across many industries and is effective because customers are viewed as more objective than the company itself. However, smart hospitality organizations should look beyond using social media as merely a property or brand reputation management tool. Thats really only the beginning.

Serving the social customer.

According to the Nielsen social media report, 60% of people who use three or more digital means of research for product purchases learned about a specific brand or retailer from a social networking site. 48% of these consumers responded to a retailers offer posted on Facebook or Twitter.3 Indeed, these are the days of the social customera customer who might take a question to Twitter, a customer service query to a user forum, a compliment to Facebook, or a complaint to Yelp. Because more and more consumers are communicating with companies this way, its a worthy exercise to consider how your company will interact with them online. You should also consider how CRM fits into the picture. Gartner expects the social CRM market to reach over $1 billion in revenue by year-end 2012, up from approximately $625 million in 2010.4 Why? Because for any business, uniting all interactions, including social media, under one customer record makes sense. It can help you respond quickly and relevantly to the social customer. Consider these basic steps. Listen to what your customers say in social media channels. Analyze the data in those postings. Link the information to existing information within your enterprise. Take action on those links. The steps represent a good framework for any social CRM servicing strategy, a place to start as well as a set of simple guidelines to be sure your strategy is on track.

Taking marketing messages to social media platforms.

Social media platforms are now commonly part of the marketing mix for direct marketers and advertisers. As social media use becomes more widespread in the hospitality industry, it is increasingly viewed today as merely another delivery channel. There are distinct advantages to this approach. Using social media sites as a delivery platform for your marketing messages can be significantly less expensive than advertising buys, traditional public relations (PR), and trade shows.

3 Nielsen, p. 2. 4 Gartner Inc., Adam Sarner, Ed Thompson, Jim Davies, Nikos Drakos, Chris Fletcher, Jeffrey Mann, Michael Maoz, Magic Quadrant for Social CRM, July 2011, p. 3.

Infor CRM
Infor is in no way committing to the development or delivery of any specified enhancement, upgrade, product or functionality. See disclaimer paragraph contained herein.

However, just as with any marketing or communication strategy, social media marketing takes sound management and control to reap the greatest benefits. Whether you are already using social media to market your property to guests, or you are a new entrant considering using social media, there are smart ways to implement it in true CRM and real-time fashion to get greater lift in marketing response rates and profitability. The key is making it relevant, and that begins with a sound strategy.

Social CRM as business strategy.

Consider thinking of Social CRM as a business strategy rather than just another delivery medium. It benefits the business by fostering engagement, participation, and interaction among customers, prospects, and partners in the way they want to interact with your company. It has a strong sense of immediacy and, when done right, high read and response rates. It begs to be made personal. It supports sales, marketing, and customer service processes. Despite its moving boundaries, theres one absolute about Social CRMit will be mandatory, not optional, for most hoteliers in the very near future. Analysts predict that analytical solutions and deeper integration with traditional CRM processes and social-network services like Facebook and Twitter will be the focus of social CRM R&D in 2011.5 This brave new world demands coordination before collaboration. Thats why its important to include any social media tactics under the umbrella of CRM strategy.

Why?
The use of social media as a marketing channel is controversial. Will it delight customers, become more annoying than dinnertime phone calls, be ignored like direct mail and e-mail, or become regulated for marketing purposes? Some predict that through 2015, 75% of marketing organizations will view social media as simply another channel, annoying customers and failing to deliver significant value to the CMOs strategy.6 Social media marketing very well might be viewed that way, if done badly by business. But it doesnt have to be that way. Enter Social CRM.

Make it relevant.
Lets take a look at some ways a hospitality company can use CRM and real-time marketing to leverage social media as a communications channeland in the process bring effectiveness and finesse to the social media presence.

1. Leverage Twitter.
One use of social media as a part of a planned marketing strategy would be to tweet guests before arrival. First, the property must motivate guests to sign up to follow it on Twitter via a promotional freebiesome type of bonus, such as a free appetizer at the bar. Then the property can leverage the private tweet functionality to send out tweets before guests arrive. A non-CRM approach would be to send them a billboard type tweet, such as:

5 Gartner Inc., Michael Maoz, Jim Davies, Ed Thompson, Michael Dunne, Adam Sarner, The Concise Social CRM Vendor Guide, 2011, October 2010, p. 1. 6 GGartner, Inc., Kimberly Collins, Five Ways Social Media Will Revolutionize Marketing, Aug. 15, 2011, p. 3.

Infor CRM
Infor is in no way committing to the development or delivery of any specified enhancement, upgrade, product or functionality. See disclaimer paragraph contained herein.

We are looking forward to your stay at Hotel X. If we can do anything before you arrive please tweet us back anytime.
To take this to the next level, the property could use a real-time marketing tool to package a true customer-centric message/offering to the guest based on his or her profile and the profile of guests with similar preferences, as well as the propertys preferred offering set. In this example, Mr. & Mrs. Harrison have asked for a room in a quiet area of the hotel. This behavioral data, along with several other demographic, psychographic, and past behavioral data elements, have been leveraged by a real-time miner in the CRM system to arbitrate between three possible messages for which the Harrisons qualify: Message A: Join us for a night of fun and dancing at Charlies Bistro the night you arrive. Just reply yes to make your reservation. Spots go fast! Message B: Its Mia from the Spa at Hotel X. We have a few spa openings during your stay. Reserve an individual or couples massage. Reply yes now. Message C: Greetings from Hotel X. A candlelight prix fixe dinner in our elegant restaurant on 45 is waiting for you. Please reply yes to confirm. Any one of these offerings, if accepted by the guest, will generate more profit for the property. But how to increase the chances of acceptance? When the real-time engine calculates the likelihood of the Harrisons accepting these offerings, it ranks the choices this way: Spa first, then dinner, and finally dancing. The real-time engine also understands the anticipated business profitability for each of the offerings as well as the inventory of the offerings, be they ever fluctuating spa slots available or dinner seats for the prix fixe menu in the next 15 minutes. The real-time engine arbitrates between the three offerings. Ultimately, the tweet that goes out is for the prix fixe dinner, due to both profitability and availability/business desire to fill the restaurant.

2. Leverage guests love of deals.

The IBM Institute for Business Value recently published a revealing report that clearly identifies why consumers are motivated to follow a business on a social media site. The report found that the top two consumer motivators are to get a discount (61%) or to purchase (55%), followed closely by reviewing and ranking products (53%). Not surprisingly, this stands in conflict with the businesses perception of why consumers are Liking or following them on social media. In the report, the businesses thought consumers followed them to learn about new products (73%) or to get general information (71%).7

Really?
Using social media to educate guests about upcoming or last minute discounts and deals should be leveraged as an excellent way to manage your inventory. A CRM solution can help with this, too.

7 7IBM Institute for Business Value: From Social Media to Social CRM, 2011, pages 8-9. Retrieved from http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03391usen/GBE03391USEN.PDF in January 2012.

Infor CRM
Infor is in no way committing to the development or delivery of any specified enhancement, upgrade, product or functionality. See disclaimer paragraph contained herein.

If you are applying CRM principles to your strategy of educating guests about last minute deals and discounts, you would not send them every deal that you had because not every deal will be relevant to the customer. Furthermore, you should have a cross medium (e-mail, tweet, mail etc.) view and rest periods, so that you do not become white noise. For example, your CRM system would know that the Harrisons are retired, frequently travel as a couple, and enjoy their time together as a couple. Accordingly, it would block the e-mails and tweets you send out promoting Family Night with free pizza for the kids. Instead, it would send them promotions about guest chefs, spa discounts, or best-price tickets for a symphony concert in the area. Sending irrelevant offers too frequently is deadly, regardless of the delivery medium. Again, an integrated outbound and inbound marketing platform can make fast work of these needs and effectively coordinate the deals you offer. A CRM system provides that platform.

3. Leverage real-time welcome messages.

Customized messaging sent to guests upon arrival and while at the property is another example of the value of blending social media with CRM. Imagine a guest who has frequented other similarly branded properties and specific services, who gets a customized property directory or YouTube video that shows locations and additional information about these amenities. Here are some examples: Mr. Jones might see a private tweet from Trainer Rob at Hotel X: Mr. Jones, our fitness center on the 18th floor, open 6AM - 11PM, has free weights and resistance training. Click to schedule time with me. Mrs. Jones receives the following private tweet from Concierge Mandy at Hotel X: Mrs. Jones, please try afternoon tea at a 15% discount. Also, I have news about antiquing in town. Click here to call me. Remember, timing is one of the critical components of the CRM adage of sending the right message, to the right customer, at the right time, via the right medium. You could send these messages as private tweets or as private Facebook posts via the use of triggered events depending on what the CRM systems knows about a guests social media preferences and on-property behavior.

Coordination before collaboration.

If the above examples appeal to you, where do you start? Here are five key guidelines for making sure youre prepared, so you can maximize the significant time investment in social media:

1. Take inventory.
Assess what you are doing today in social media. Perhaps you are sniffing for positive or negative mentions of your property or guest experiences. As is growing more common, you may be managing a Social Servicing department. Or, maybe you have sidebar advertisements on the Facebook home pages or YouTube home pages. Whatever your existing tactics may be, begin with an analysis of their effectiveness today.

Infor CRM
Infor is in no way committing to the development or delivery of any specified enhancement, upgrade, product or functionality. See disclaimer paragraph contained herein.

2. Strategize.
Do some research, then brainstorm and strategize on what you might like to implement as new social media tactics. Our recommendation is to begin to include social media as delivery points for your marketing messages and to overlay a CRM-centric approach to your messaging via social media.

3. Set a goal.
Define a purpose for your social CRM project based on what it can do to assist and engage customers, and how it can improve a key business metric, such as reservation rates, inventory management, spend per visit, and cost-to-serve.

4. Dont overdo it.

Layer your new social media strategies and tactics onto your existing crosschannel marketing roadmap or calendar. Treat them as campaigns and include cross-media rules so as not to oversaturate the customer with touches. Remember social media is an effective medium for customers to share their issues with the world, so you must be cognizant of having a touch strategy with maximum number of touches, rest periods, etc. Use your touches as you would a spice. Easy does it.

5. Find the right solution.

To take your plan to the customized level, you must leverage some type of sophisticated real-time offer decisioning and delivery software that can manage the complexities of real-time offer arbitration and delivery simultaneously across multiple customer touchpoints. CRM solutions are designed for this and offer tools for managing touchpoints that include social media, like Facebook pages and Twitter tweets.

Consider Infor.
The Infor10 CRM Epiphany Marketing Suite, which offers both traditional outbound marketing functionality and Infors unique Interaction Advisor real-time inbound marketing solution, is a toolset to deliver on any sophisticated CRM offer delivery strategy, especially one that includes social media. The Infor10 CRM Marketing Suite makes it possible for hospitality companies to easily and effectively manage a highly complex marketing strategy across all of their customer touchpoints. Moreover, because it uses a rich data set, sophisticated likelihood modeling, business benefits, and business rules to arbitrate among competing offers, Interaction Advisor can ensure that the message you tweet or post privately via Facebook is one that will be more likely to be accepted by the customer. And that it will deliver higher business benefit. By tracking and evaluating every interaction you have with each guest based on their real-time activity, you will get better response rates, increase your revenue, and improve customer satisfaction with your communications. Interaction Advisor combines historical, personal, and contextual information, as well as real-time analytics capabilities and business rules, to help customer-facing channels present the most attractive offers for the business in a way that is best suited to the customer.

Infor CRM
Infor is in no way committing to the development or delivery of any specified enhancement, upgrade, product or functionality. See disclaimer paragraph contained herein.

Get started today.

Infor Epiphany Interaction Advisor drives the sophisticated decisioning described here. Enterprises that use Interaction Advisor as the engine driving their CRM decisioning are improving their customer retention by 50% or more. They also are doubling and tripling their offer acceptance rates and increasing total inbound marketing revenue by 10% or more. Are you ready to explore a CRM solution for your social CRM strategy? Find out more at www.infor.com/solutions/crm/.

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Disclaimer
This document reflects the direction Infor may take with regard to the specific product(s) described in this document, all of which is subject to change by Infor in its sole discretion, with or without notice to you. This document is not a commitment to you in any way and you should not rely on this document or any of its content in making any decision. Infor is not committing to develop or deliver any specified enhancement, upgrade, product or functionality, even if such is described in this document.
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