There are two schools of thought in the Digital Marketing sector, that at times clash on their approach to the market. On the one hand, we have those that claim that clients’ past behaviour predicts the future. On the other hand, we have those that insist that the present moment is best when predicating clients’ immediate behaviour, the present moment being the moment when a client or possible client starts the search process that will lead to the final purchase.
Client information is stored in the CRM (Customer Relationship Management) whereas a DPM (Data Management Platform) is used to manage the present moment and its interactions. Some feel that the DPM is an extension of the CRM and that in the end all the information must merge in one place.
Here at Idiso Digital we have worked with both fields for many years now, and we feel than in some way both sides are right. It is true to a certain degree, that with certain products, services and clients the past predicts the future, specially in the hotel world where between 15 and 25% of clients are returning customers (except with large hotel chains that cover all segments and have powerful loyalty programs). But the remaining 75 to 85% are impulse clients, ones that decide to go to a specific destination and a specific hotel because of present circumstances: a great flight offer, an inspiring review on a social network, a friend’s recommendation. This is where DMP comes into play, based on the consumer’s present behaviour: what they are searching for, what they see and what they post.
It is also where the new Digital Marketing Platforms come into play, by integrating the client’s full sales history and intentions and in this way offering the best product at the best time and for the best price. To do this we need to work with both Inbound Marketing, marketing content activities, social media management or SEO strategies, and Outbound Marketing, that encompasses display, metasearch engines, SEM and email, so that, using attribution algorithms, we can follow the consumers’ journey in all its phases while they attempt to book their trip.
The two schools of thought meet when it comes to integrating CRM data into the new marketing data bases, DMPS, that are used to define the possible client type (defining people) and to search, based on that definition, for similar clients (twins or look-a-like).
The ability to integrate this data and use it efficiently in the sales funnel is what defines success in today’s Digital Marketing. It is essential, if we want to exploit this ability to the full, to manage the largest amount of data as possible, this is why the large digital platforms are taking the lead in this race, there is a market fragmentation, where the two big OTAs are monopolising traveller information, and are able to not only predict the future based on the past, but also to be present in any transaction of the digital traveller and offer the best product at the best price at the best moment. We feel that this lead management, based on the client’s intentions, is the future of Digital Results Marketing or Performance Marketing.
Where does CRM fit in?
At a time when most of our customer relations are digital, Customer Experience, what our clients experience while using our products is one of the features that will make the difference, meaning they will buy, repeat, purchase our higher priced products and recommend us, so important in the hotel sector where reviews are our daily bread.
So, this is where CRM has its value, remembering it is the processes, systems and people that are able to recognise, differentiate and personalise each client’s experience. Specially for large hotel chains, that cover all client segments and might have business clients booking in their vacational hotels. Or hotels that, because of their type, tend to have a very high percentage of repeat custom, and that are able to offer a higher level of personalised service. In specific, we have clients with more than 150 cases of personalised service and more than 35% of loyal clients that book through the direct channel; this is where a CRM methodology fits in perfectly.
But it is not easy, due to the cost and the complexity of the systems and processes involved. Therefore, we recommend that hoteliers examine what it entails, in detail, and go on to develop a detailed Business Case that clearly shows the ROI and risks of each project, as, in our experience, most don’t have the expected return over investment, and involve another inestimable cost: the effort dedicated to this project and hence taken away from others with larger return.
On the other hand, if we want to separate the direct channel client, here at Idiso Digital we recommend developing Immediate Reward strategies, immediate advantages for booking directly with the hotel, or strategies with a low technical complexity such as simple cross-selling or upselling programs, that allow us to improve our client relations but don’t entail the technological and financial effort involved in implementing a CRM program.
In summary, according to our experience, the best predictor of the behaviour of most clients is their present behaviour, therefore it is essential to develop client programs that recognise and pamper direct clients; and we must closely analyse our client portfolio to decide if it will be profitable to initiate a CRM and Loyalty program.