2002 Hospitality Upgrade

No reproduction or distribution without permission.

Small Hotels & CRM
Small Hotels & CRM
By:John Schweisberger and Amitava Chatterjee, CHTP

2002 Hospitality Upgrade. No reproduction or transmission without

written permission.

CRM is not only for the big chain hotels with deep pockets; CRM is
equally within reach of the small, independent and boutique hotels.
In the hospitality industry, nothing is more important than your guests. Everything
revolves around them. Do you know who they are? Do you know how they like to
communicate with you? How they like to book their stays, and how often they stay
with you? Do you know how much they spent in the restaurant, the bar, the gift shop
and the spa? What did they consume from their minibar? How and when do they
want to hear from you again? Do you know if they had a good time or if youll ever
see them again?
Understanding your guests, knowing how to talk to them, making sure they generate
repeat business and finding other guests like them are at the heart of customer
relationship management (CRM). How do you ensure that your guests come back to
you, when, in this day and age, competition is just a click away? CRM is not just
fancy software capable of drawing a bunch of smart graphs and generating a
targeted mailing list; it is a way to effectively communicate with your guests, not
only using traditional marketing channels but also while they are booking their stay,
waiting for check-in, while they are in-house and after theyve left. Most importantly,
CRM is not only for the big chain hotels with deep pockets; CRM is equally within
reach of the small, independent and boutique hotels.
Remember CRM is not about technology; it is a way of running the business.
Powerful words. Read on.

How will CRM benefit the small hotel?

The success of a CRM implementation is not dependent on the size of the hotel. In
fact, having a well-executed program will even allow a small hotel the opportunity to
take advantage of various benefits, including:
- Increased revenue by identifying the most profitable guests and directing superior
service their way;
- Increased each guests spend through strategic channel usage and cross-selling
and up-selling techniques;
- Improved service by serving guests from various channels with consistent, quality
information about their needs;

- Captured ongoing guest information to personalize their experience and make it

truly memorable, ensuring that each moment-of-truth interaction enthralls the
guest;
- Enhanced decision-making by better understanding and reacting to guest behaviors
through analytics and measuring performance at all touch points.
Areas to Focus on. How does the small hotel implement CRM? Should the small hotel
operator take out a checkbook and sign at the bottom? Will it require an elaborate,
longwinded investment in technology? No, not really. Where should you begin? We
offer the following pointers.
Staff training ensuring that they understand what they need to do. You will find a
knowledgeable and trained employee at the heart of every successful CRM initiative.
How well the program is implemented is completely dependent upon employee
training. Do your employees understand what their tasks are? Do they ensure that
they collect accurate data? Are they aware of GIGO or Garbage In, Garbage Out, and
its ramifications? At the risk of sounding repetitive, we offer this statement from an
earlier article titled Effective CRM Implementations All employees, at all
properties, should have the training and up-to-date information that allows them to
provide seamless, consistent, personalized service to the customer. Let us analyze
that statement it is laden with several key words that merit another read.
1. Training Is your employee well trained? Does he or she understand his or her
roles and responsibilities with respect to the CRM initiative being implemented?
2. Consistent Staff should be adept at providing consistent service, visit after visit.
No roller coaster-type ups and downs of guest experiences permitted.
3. Personalized Does your staff know that Mr. X likes a foam pillow and Ms. Y likes
a feather pillow? Speak to your employees. Ensure that they understand service
excellence and are experienced in delivering good service.
How do you gather data? There are many different tools and technologies that can
help in implementing effective CRM. They may be as simple as 3 inch by 5 inch index
cards with detailed notes about your frequent guests, which record their preferences,
likes and dislikes, to some kind of searchable application, which may be standalone,
or might even be a part of your existing PMS. In the words of Pat Barfield, directorbusiness development/major accounts with Springer-Miller Systems, Several PMSs
have the capability to record some level of guest history. It is important for hotels to
explore what capabilities already exist, and leverage those in their CRM initiatives.
Indeed, it makes financial sense to inventory your existing software assets and see
what you can use, doesnt it? See what capabilities are available, and what
capabilities you can use but are not activated. Check with your software vendor if
you can add additional columns to database tables, additional fields to screen masks,
etc., which will allow you to collect the information you want. Find out and have new
reports coded, which can generate meaningful information.

Real-life Experiences
One small hotelier recently decided to launch a broad CRM initiative across their
seven properties. The first step involved defining the information that would be most

useful to have about their guests the information on which they could act. When
the dust settled, what they found most surprising was that they already had the
ability to track most of this information in their existing PMS what they didnt have
was a rigorous process to capture and cleanse the data on an ongoing basis. Their
processes were lagging behind their technological capabilities. The result:
uncaptured and unusable data. It wasnt the systems fault, though they were only
too ready to spend money for the latest whistles.
With that stark realization, they set about making changes in every guest interaction
opportunity when they call, when they visit the Web site, when they check in,
when they make requests and even when they receive marketing offers. An
executive was appointed with the unique responsibility of owning the guests. They
recognized one of the core, but frequently lost truths, about CRM: it isnt owned by
marketing, IT or operations rather, it permeates all of these areas. The small or
large hotelier who understands and operationalizes this truth will quickly stand out in
the most important eyes of all: the guests.
Brian Schultz, a marketing analyst with Four Seasons Residence Clubs in Calif., said,
An essential element for any CRM strategy is data entry standards and training. It is
definitely worth the time and resources to focus on data entry training, which will
ensure a more accurate database of your customers information. These should all be
a part of the planning process for CRM. Ultimately, organizations rely heavily on this
information to maintain or enhance the relationship; however, if data is entered
incorrectly, or entered into the wrong fields, organizations cannot report from or
analyze their customer base no matter how expensive or sophisticated the CRM
software is. Clean and accurate data is the link to building a strong customer
relationship, and it all starts with proper training and standardized data entry. In
addition, it is important that you have ongoing monitoring and training processes in
place, to ensure that data entry standards remain high.
Ensure you have a guest-centric view. Both Pat and Brian maintain the importance of
having a guest-centric view, and ensuring that all your business processes revolve
around your guests. Further, Brian said, Todays guests are beginning to look more
for an overall service experience. It is not just about price, it is about the service,
the product, the price and the overall experience. As guest expectations increase,
business processes must remain flexible in order to meet their needs. By meeting or
exceeding expectations, the organization strengthens the relationship and increases
the likelihood of retaining loyal guests. Building a base of loyal guests is key to
profitability and a high ROI for any CRM implementation.

Conclusion
We do not recommend that small hotels shy away from implementing a CRM
program. They should remember that CRM is about how the business is run. The
bottom line is what every good hotelier, large and small, must focus on. And it is
easy to be afraid for your bottom line when you hear statistics that claim that twothirds of CRM initiatives fall short of the projected benefits, despite large investments
of time and money. The bottom line of CRM is: it is not enough to market effectively
if you cant service effectively, and you cant service effectively if even one employee
doesnt get it. No technology will overcome that.

Further, the concepts alluded to by Pat Barfield and Brian Schultz should be a part of
the planning process for anyone contemplating a CRM implementation, and more
specifically, for those entities who may have limited capital and resources.
Leveraging existing capabilities, data accuracy, standards and training are the
foundation for any such initiative and can be internalized and implemented to ensure
the success of a CRM project. So start your CRM initiative right where it belongs:
with your people and your processes.
John Schweisberger (john.schweisberger@us.pwcglobal.com) is a partner with PwC
Consultings Hospitality & Leisure practice, based in Los Angeles, Calif. Amitava
Chatterjee (amitava.chatterjee@us.pwcglobal.com) is a consultant in the practices
Falls Church, Va. office.