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We all know that a hotel, as every ther industry, can't function without Guests. The fact that not all clients bring identical benefits,  is widely known and understood.
Question is, can we do something to make sure that our actions and money (spend mainly on marketing and customer relation) are commensurate with the benefits of working with a given client? Finally, we need to ask ourselves a question "who is a key customer for us?". Tomasz Chojnacki - Managing Partner at Hotel Marketing Group will tell you about work, analysis and management of key clients.

Who is the key customer in the hotel industry?

The attractiveness of our hotel for the client is the result of the customer's analogous approach to the hotel industry: the higher the rating of our hotel based on the criteria set by the client, the greater our attractiveness. Therefore, in order for a key customer relationship - a key hotel - to have a chance to be realized, we must ensure the highest possible value of our property for the client.

Determining customer's attractiveness criteria for our hotel is one of the first steps to identify key customers. For this process to be complete, we must also determine the level of attractiveness of our hotel for the client. What does this mean in practice?

We must conduct a thorough analysis of existing clients in terms of:

 1) current revenues

First of all, we have to choose from our current customers a group that has generated the most revenue for the hotel over the last years. Separate, of course, those who received discounts, so that customers with high turnover and not necessarily a large margin, do not undermine profitability. We're only interested in income. According to the Pareto principle, the key customers are usually 20% of clients who provide 80% of the profits for the facility and we are looking for such clients.

 2) image and its impact on other customers

Positive or negative impact of customers and companies on other clients is normal. There will always be a client who does not want to cooperate due to the fact that we cooperate with its competitors, and more often we find those who will cooperate as soon as they see that we cooperate with key companies on the market. This is a very important, even strategic ability to choose partners for their image on the others.

For example, if we have a company on the list of clients, eg from the food industry, which strongly competes with another similar company in this industry, it may turn out that its image will work negatively and we will never win both companies. If the image works positively, we can win both and then we will classify the given company to key customers or we will not classify it.

From the point of view of long-term hotel policy, the special features of clients are strategically important to our interest, such as having this particular company among our clients very important from the point of gaining new customers.

 3) the potential of a given client

Assessment of the potential of a given client consists in determining the amount of probable revenues, increasing the level of current revenues by means of an appropriate strategy, or in short Lifetime value (also called customer lifetime value, LTV analysis, aims to assess the current value of future cash flows related to the relationship with the buyer, and therefore the assessment of the client's value over time).

Let's also remember that in our analysis, we must calculate the cost of acquiring a possibly profitable key customer, which sometimes is very high.

Without carrying out analyzes, it may turn out that our trade policy based on the "more or less the same principle" may be associated with certain risks. Firstly, because we can have clients who are unprofitable among our clients (eg they received too much rebate from a sales representative at the beginning of the sale and it is hard to tell the customer that he has to pay more), which means that the costs exceed revenues achieved thanks to cooperation. Secondly, applying the principle to all equally, can cost us too much, because we do not have enough financial, material and personal resources to support these key. Thirdly, focusing on acquiring new customers may result in the loss of permanent, loyal customers due to the lack of sufficient care for them. And fourthly, that without establishing the key customer profile, we will not be able to answer the question whether the client we try to stay with us for longer.

Segmentation

Segmentation is all about dividing customers into smaller groups of very similar clients. We use this division in order to treat each group of customers optimally (in line with the client's expectations and our profitability). For example, give additional support and care to new clients, be more flexible and go beyond the standard for key ones who generate the majority of the company's revenues and profits. The standard example of customer division into two segments is the division into individual clients and companies. Each of these groups requires different treatment, has a different purchasing process and analyzes other factors when choosing a hotel.

Sample customer groups:

Potential - a client with whom we talk about our services, so far he have not used the services of our hotel

New - the client who made the first booking recently is it until departure from the facility

Active - a customer who regularly uses the hotel's services during one year, at the same time does not belong to the group of new or key customers

Key - a customer who generates a large income within one year and belongs to the group of clients generating 80% of the object's revenue

Lost - a customer who has stopped using hotel services, has not used it for the last year

Unwanted - a client with whom we do not want to cooperate for various reasons, so-called from the black list

Inactive - a customer who ceased to exist, eg closed the business

Competition - our competition, which, for example, as part of an exchange organizes a company event in a hotel for employees or gives us guests when there are no free rooms

In customer segmentation, you can also use RFM analysis, which takes into account three components - when the last purchase of the service took place (ie "recency"), how often the customer uses our service ("frequency") and what amount of money with us it issues ("monetary"). Each component is given the appropriate weight and calculates the final value. The RFM coefficient can, of course, change over time and if you decide to use this methodology, you should follow these changes.

Segmentation is definitely a useful method to better serve hotel customers. It also carries some risks. Clients may be improperly categorized and thus treated inappropriately, of course the same may happen if we do not have segmentation, but in this case the difference may be much larger.

Marketing activities

If we want to reach key customers, we must prepare our marketing department to properly direct the message. It is the basis of our activities. Each campaign is able to reach a narrow audience, just take care of it.

Some useful tips:

  • Check the needs and tastes and potential
  • Prepare a dedicated special offer suitable for the segment based on customers needs
  • Separate email base that will contain email addresses to key customers
  • Create a database of phone numbers suitable for a given segment
  • Direct the campaign to a higher class using filters with education or relevant positions
  • Plan a series of personal meetings, if it is possible to be close to a given company / person
  • Make friends with key clients also in the area of social media
  • Keep relationships - it's extremely important
  • Keep up to date, the fluency of the managerial staff is a normal matter
  • Do not give up, achieve your goals

Key Account Manager must be effective. This means that the effects of his/her activities should be measurable and analyzed at regular intervals. The condition for the effectiveness of such specialist is therefore to develop a set of goals to be implemented and then a measure of their implementation. In turn, the impact on the implementation of the assumed plans will have such a factor as the selection of specialists for the team (each of them will have a role to play in the process of building relationships with clients). The team of key account specifiers should not consist of "stars", because their main characteristic is individuality, and the desired effect will be achieved by cooperation, rather than rivalry, between sales staff. It is worth to formulate a vision of a team that would reflect the priorities adopted by a given tourist object.

Key customers as part of CRM

Considering the problem even more broadly, we can consider the issue of key customers as part of the entire CRM process (customer relationship management),  which is a set of procedures and tools important in managing customer contacts. CRM is a new approach in the field of management, because it integrates sales, order fulfillment and service offerings, coordinating and uniting all components of the interaction process with the consumer.

The CRM concept in the business world has existed for a long time, but it has become more popular recently due to new technological possibilities and the integration of various data. Thanks to this, the collected data can be stored in an IT system, updated and conveniently updated and analyzed. In advanced CRM systems, it is possible to perform comprehensive analyzes of customer data, such as multi-dimensional customer segmentation, customer value analysis, loyalty analysis, basket analysis.

You can name a few, very important from the company's point of view, benefits of CRM software. Simply put, it is better customer service, increased cross-selling and upselling to existing customers, availability of information that facilitates key decisions, customer profiling and better target marketing, establishing and improving business contacts, all of which may lead to increased revenue and profits.

Of course, the CRM system used in practice must take into account the size and complexity of a given company, and in this case a given hotel, so as to meet its needs and not constitute an excessive financial burden. When choosing it, besides the cost of purchase and technology used, it is also necessary to consider its friendliness (usability) for hotel employees.

 

The author of the article is Tomasz Chojnacki

A graduate of Management at the University of Business in Wrocław and the Tourism and Recreation Organization. For 14 years in the interactive industry, from 9 associated with the hotel and tourism industry. He worked for such brands as: Mercedes-Benz, Koleje Dolnośląskie S.A. or Thomas Cook AG. For the last 6 years, he held the position of Sales Department Director in PROFITROOM, where he built the sales department from the beginning, and later, as the Key Account Director, he took care of the optimal selection of tools for hotels and providing them with the highest quality of service. He visited over 750 hotel facilities.

Currently, the founder of the Hotel Marketing Group, dealing in internet marketing, campaigns in social media and improving the image and opinion on the Internet. The company is also a supplier of the innovative ecosystem of HotelEye products, used to analyze competition and control marketing activities. This is the first analytical product of this type for hotels in Poland.

 

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