Lisa Morgan's Official Site

Strategic Insights and Clickworthy Content Development

Month: October 2017

Hotels Check In with More Analytics

Hotels continue to invest in analytics so they’re in a better position to optimize revenue, deliver better customer experiences and improve operations. Like other organizations, hotels realize they can improve their competitive position using data and analytics more effectively than others. To do that, they need to integrate data coming from different functional areas and connect internal data with external data to make material improvements across the board.

Revenue Optimization

Hotels are moving past historical data and current bookings to maximize room occupancy and profitability. To improve their effectiveness, they’re using competitive data, weather dataevent data, predictive capabilities, and more. Starwood Resorts is experimenting with machine learning and neural networks to change pricing dynamically, rather than twice or three times per day or seasonally.

The goal is to optimize the profitability of each room, not just hotels at large

Customer Loyalty

Customer loyalty programs have evolved with data analytics capabilities to provide guests with better, albeit different, experiences. For example, some guests care more about the quality of concierge services than Wi-Fi. Hotels must understand such differences to understand a guest’s preferences and cater to those preferences. After all, every customer has an individual expectation of what a “good” hotel experience is, not just the Premier or Platinum members. While the most profitable and loyal customers deserve exclusive benefits, catering to them should not be done at the expense of other guests.

To provide better experiences at all levels, hotels are attempting to understand their customers more holistically than they have in the past to provide a relevant experience. Having a “special requests” textbox in a booking application yields some information, so are customer requests and feedback recorded at the front desk. Another way to understand customer preferences is to slice and dice room offerings based on non-traditional amenities, such as allergen-filtering, in addition to the usual size, price, category and smoking/no smoking designations. Tracking a customer’s preferences over time, helps too in an effort to anticipate guests needs and desires.

These days, loyalty isn’t something that kicks in at check-in. Hotels are using search, online bookings, social media, call center data, front desk data and surveys to better understand customer journeys and what people want.

Moving up a level or two, some are targeting Millennials, which included Pokemons in the pool and on beds at Marriott hotels, clearly a non-traditional “benefit,” though an attractive benefit for those caught up in the Pokemon Go craze. The campaign happened to be a very smart marketing move from a social media point of view — free advertising.

The relationship among marketing, customer loyalty and revenue optimization enables a continuous feedback loop where insights from one bucket inform the others. And that’s not all.

Operations

Third party data can be very valuable from a predictive point of view when it impacts hotel occupancy and profitability. Weather and event data are two examples. Here in Sedona, Ariz., wildfires and heavy monsoon rains can cause massive hotel room cancellations. In other cities, popular concerts, sports games and flight cancellations cause a spike in demand. While those things may seem intuitive, actual data feeds can help hotels plan for the dips and spikes more accurately, so they can right size things like staff on hand and supply orders.

From an internal perspective, hotels need to monitor and constantly improve the efficiency of individual functions such as housekeeping, not only to reduce costs, but to keep up with competitors’ improvements. Some operational information is used to craft marketing messages such as Starwood Hotel’s “Smart check-in.”

Analytics is also providing insight into age-old issues such as sluggish room service. Is the problem too many simultaneous orders, too few members of the kitchen staff, poor kitchen management, something else or a combination of things? Operational analytics provides some insight as will guests’ social media posts, survey data, call center data, front desk data, etc.

Mobile

Hotel chains have mobile apps that give them even more insight into customer behavior, especially as they expand out from reservations made using a mobile device to keyless entry (using a smartphone), mobile food orders and more.

Some hotels are adopting “mobile first” strategies given the popularity of the devices and the fact that more hotel customers are using mobile devices instead of laptops to book rooms.

Hotels face many of the same problems enterprises face generally, not the least of which is connecting dots in a way that is valuable to their organizations and customers.

How Analytics Are Changing Frequent Flyer Programs

Airlines gather and analyze more data than ever before to improve operations and deliver better travel experiences. One of the most effective data-gathering tactics has been the establishment of frequent flyer programs.

In the beginning, those programs enabled the airlines to identify their “best” customers — those who flew more than others or spent more for seats than others. Today, frequent flyer status is determined by a much more sophisticated calculus that involves many data points , some of which are very creative. The data provides insight into customer behavior and preferences, as well as operational issues that need to be addressed for compliance or competitive reasons.

Like other businesses, airlines use increasingly sophisticated website analytics to better understand customer behavior and preferences. They also use mobile app data and social media data and they’ve structured partnerships with other airlines and businesses.

In short, airlines have more insight into travelers’ preferences and behaviors than ever before.

More Perks Mean More Data

Airlines offer branded credit cards because they provide insight into customers’ purchasing habits. Their partnerships with other airlines provide additional information.

Meanwhile, airlines continue to expand their frequent flyer programs beyond hotels and rental cars to include all sorts of things including flowersa marriage proposal kitwine and even a dog sled ride. Apparently one gentleman managed to rack up over 1.2 million miles purchasing massive amounts of pudding. If you’re interested in earning up to 250,000 Qantas Frequent Flyer program miles in a single purchase, buy a Jaguar.

Interestingly, Qantas Frequent Flyer members can use their miles to pay for the healthcare insurance Qantas offers. (Imagine that on the US Congressional agenda!) As part of its Wellness program, parents and their kids can earn points just by downloading the app and staying active.

Every swipe, every click, every soccer ball kick now matters.

Analytics Means Business for Some Airlines

Qantas’ Loyalty department is so effective, the company made the group available for hire so other businesses can maximize the ROI of their marketing and loyalty programs. Its strategy caused Virgin Airlines Australia to acquire an analytics company rather than building an internal capability.

Air Canada’s Aeroplan story is also interesting. In 2002, the airline spun off its loyalty program as a separate company. However, in 2020, Air Canada will launch its own loyalty program — again.

“The new program, launching in 2020, will offer additional earning and redemption opportunities, more personalized service and a better digital experience for Air Canada customers,” said Benjamin Smith, president, Passenger Airlines at Air Canada in a press release. “[B]y managing our own loyalty program, we will be able to take better care of our customers by making decisions in real time that address specific needs.”

Mr. Smith makes a good point. Fast data and combined data sources enable airlines to provide contextual experiences. Text alerts of flight delays or gate changes are just two examples. Airports have their own analytics infrastructures which feed certain information to airlines. Not surprisingly, airlines are also monitoring what’s happening in their member-only lounges so they can provide additional competitive benefits and improve operations.

HR Use of Social Media Grows, But Is the Data Reliable?

A recent CareerBuilder study of 2,300 hiring managers and human resources professionals shows that more employers are using social media to make hiring and retention decisions.

Drinking, partying and Kim Kardashian-like “break the Internet” posts are clearly unwise for anyone who wants to build a career or keep a job. According to a CareerBuilder press release, among employers who use social media networking sites as a source of information, 54% decided not to hire candidates based on their social media profiles, half of employers check employees’ social media profiles, and more than a third have reprimanded or fired an employee for inappropriate conduct. Seventy percent use social media to screen candidates.

Conversely, 57% are less likely to interview a candidate they can’t find online.

“The majority of employers are looking for information that supports their qualifications on the job [including] a professional persona, and what other people are posting about the candidate,” said Rosemary Haefner, chief human resources officer at CareerBuilder.

Employers want to know how well candidates are able to communicate and whether they exhibit prejudice against persons of a different race, gender or religion. They’re also interested in things candidates have to say about their previous employers, whether they’re lying about their qualifications, and more.

“Post at your own peril,” said Attorney James Goodnow, legal analyst. “Everything you put on Facebook, Instagram and Twitter is fair game for employers and often will have more of an impact on your employment prospects than what you say or do in a job interview. The reason: many employers consider what you post on social media to be the ‘real’ you.”

What if social media forces factual inaccuracies?

LinkedIn is the go-to place to find a person’s professional qualifications and work history, although abbreviated versions of the same information may appear in other social media profiles. What would happen if a person were kicked off one of the networks? Would it matter to the others? What would the person do?

Suppose that Facebook, relying on its famous algorithms questioned your authenticity after years of account activity. True, there is a grievance process. A person can send personally-identifiable documents, hoping to reactivate the account, which reportedly works for some people and not for others. If it doesn’t work, you could try to open another account on the site, but all of the data associated with the original account — email addresses, home town, educational background, and the like — might not be permitted under the new account. You become an unperson in the social media world.

Aside from the potential HR issues, another question is whether such an incident affects a person’s credit score.

Why social media doesn’t score at FICO

FICO looks at thousands of variables, but it tends to use less than a hundred when calculating a person’s credit scores. Apparently, the use of more variables leads to diminishing returns.

“Social media does not play into FICO scores in the U.S.,” said Sally Taylor-Shoff, Scores Vice President at FICO. “In the U.S., lenders use FICO scores to make lending decisions. Lending decisions are regulated, so the use of social media data will not meet the compliance requirements most lenders have to deal with.”

Past payment history is the most predictive indicator of whether a person will repay a loan. If the person doesn’t have a loan history, then FICO uses that person’s payment history of rent and cell phone bills, for example.

“We use a six-point test to evaluate whether that data should be used: whether it meets regulatory requirements, whether it has enough depth and breadth, enough scope and consistency in the data, and whether it’s predictive,” said Taylor-Shoff.

Accuracy also matters.

“It can’t be something consumers can just use or manipulate,” said Taylor-Shoff. “Credit data comes from creditors.”

Even though there may be some inaccuracies, lenders are legally required to have a grievance process consumers can pursue, and there’s no shortage of consumer protection information about what an aggrieved consumer can do.

In the social media world, bot decisions may be final, and there’s not necessarily a lot of transparency.