There’s an interesting dichotomy taking shape within the world of hotel marketing: Guests are asking that their experiences be uber-personalized – they’re annoyed by constant, generic emails with offers that don’t make sense for them – while at the same time companies like Apple, Google and Facebook are moving to protect user data, which limits hotel companies’ ability to track travelers’ search and spending habits.
With less data to rely on, the expectation is that hoteliers will soon find it tough to provide the experiences that guests want. How can hotels move to provide a more Amazon-like experience – curating the right offers, the perfect location, the preferred room types, with all the personalized amenities that make the guest feel special – when much of the data they rely on today will soon be missing?
The short answer is that hotel companies must change the way they collect and manage guest data. They must shift their focus to collecting, storing, analyzing and serving up “first-party” data as opposed to relying on “third-party” data. However, this not only requires a shift in strategy, it requires additional technology and APIs that allow for data-sharing across multiple guest touchpoints, centralizing data collected from multiple CRM instances, email campaigns, social tools, website visits, and many other places where hotels interact with their guests.
While CRM technology has existed in the hotel space for a few decades, today’s tools are no longer sufficient in centralizing, de-duping, normalizing and serving the data up in real time to all the necessary systems that need it. The next step, one that will be required for marketers to make a true impact in personalizing every guest touchpoint, will require advanced marketing technology called a Customer Data Platform, or CDP. Below, we’ll walk through the differences between a CRM and a CDP, how hoteliers can use a CDP to store and analyze first-party data, and why a CDP will become table stakes for hotel companies that are looking to future-proof their businesses and ensure they remain relevant long into the future.
First Party vs. Third-Party Data
It’s no secret that tech giants like Apple, Google, Facebook and Microsoft are enacting strategies to protect user data. In April, Apple began giving users the choice to block the IDFA identifier at the app level, meaning apps are required to ask users for permission to collect and share data. Google is moving to block third-party cookies from Chrome after Safari and Firefox recently made similar moves. And Apple is introducing a new Mail Privacy Protection with iOS 15, which will eliminate many of the email tracking and data gathering capabilities email marketers use today.
Essentially, hotels and other companies – sooner rather than later – will be unable to use third-party data to learn more about potential guests and target anonymous travelers with offers. This means hotels must increase their efforts to learn more about travelers by collecting their own data on their own channels – what is referred to as first-party data. First-party data can be collected through visitors to your own website, by collecting information from past guests, opt-in email subscribers, from lists of corporate travel managers, meeting planners, wedding and event planners, etc. Loyalty program data is explicitly first-person. Most data that is generated through your PMS, CRS, booking engine, CRM or email subscription forms is first-party data.
Suppliers that help companies collect first-party data, through pop-ups on your website, for example, will become increasingly useful. This data will allow hotels to establish direct relationships with past and potential guests and then personalize marketing to these travelers.
The good news is that first-party data is higher quality. It often drives increased conversion and revenue because it allows hotels to be more accurate with their offers and experiences. The bad news is that it’s exponentially more difficult to collect and analyze, which is where a CDP comes in.
CRM vs. CDP
You may be thinking, “I already have a CRM, why do I need a CDP?”
A CRM is incredibly useful; it allows hotels to build profiles of their guests and access those profiles in real time. It allows you to operationalize and share those profiles with other systems to some degree, for strategies like email automation.
A CDP takes these efforts a step further. It organizes all the data that is collected by different sources, such as your website and social media, but also from atypical sources, and then uses artificial intelligence and machine learning to make sense of the data. It stores the data, maps it, and allows you to apply rules to action the data. It delivers the information to other systems in your marketing tech stack in complex ways that a CRM is incapable of. For example, while a CRM might serve up a previously built list of contacts, a CDP will generate a “smart” audience powered by machine learning and auto-generate this list into your marketing platform. A CDP will also make continual, granular changes to those audiences, such as updating the phone number for a guest, and then send profile information updates to subscribed systems.
Hotels can look to the world leader in customer marketing data for the best example of what a CDP can do. Salesforce has offered their Interaction Studio for years and more recently introduced Customer 360 Audiences, a platform that allows companies to connect Salesforce apps and create “a fused customer ID” to build an individual view of the customer. Salesforce says companies can connect any app, data source or device from the cloud or on-premise to Customer 360 Audiences.
The bottom line: A CRM is an important tool in managing guest engagement, but a CDP is going to provide the full picture of a guest in the new world ahead and finish the last mile of the race for you.
CDP Will Power Future Innovation
There’s a reason Salesforce has become the giant that it is today. They’ve built a community of experts and users that are constantly innovating, and providing educational resources on how to make customer data work for your company.
Hoteliers that want to remain agile and future-proof their business will consider a CDP to create unified profiles of their customers and rely on the system to make that data available in real time so they can deliver personalized experiences.