GDPR and the impact of marketing personalization on hotel, travel and leisure industries v1
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The report discusses the implications of GDPR on the hotel, travel, and leisure industries, emphasizing the necessity for personalized marketing strategies that engage individual customers. It highlights the challenges posed by GDPR's data protection regulations, the importance of data security, and the shift towards mobile and social media marketing to improve customer engagement. Additionally, it suggests that while GDPR presents hurdles, it also opens opportunities for businesses to enhance user experience and rebuild consumer trust through compliance.
GDPR and the impact of marketing personalization on hotel, travel and leisure industries v1
- 1. GDPR and the impact of marketing individualization on hotel, travel and leisure industries REPORT Building highly relevant marketing that converts more
- 2. TABLE OF CONTENTS Overview1.1 GDPR Impact on Revenue1.2 GDPR Impact on Marketing results1.3 Is Being Creative Going to Pay Back?1.4 The Most Used Communication Channels With Customers In The Hotel Industry1.5 Trends in Email Marketing1.6 How Are Loyalty Programs Changing?1.7 Marketing Leaders using Marketing Indi- vidualization as a Strategy 1.8 nº 6 nº 7 nº 8 nº 9 nº 10 nº 14 nº 16 nº 18 2
- 3. Customer Engagement Challenges for Marketing Professionals in the hotel industry Marketers that use Marketing Individualization Vs. those who don’t, from an ROI perspective Branding in the Hotel Industry When not to use marketing nº 22 nº 23 nº 25 nº 25 1.9 1.10 1.11 1.12 3 www.pirsonal.com
- 4. WE STRONGLY BELIEVE THAT CONSUMERS REQUIRE RELEVANT MARKETING COMMUNICATIONS THAT MAKE THEM REACT. 4
- 5. thought this was actually a unique opportunity for hotels to embrace engagement and create solid, creative strategies that result in a direct impact on revenue in the short, mid and long term, and also to focus on audiences of one regardless of the amount of people you have in your databases. This report will help you understand more about these changes. It will help you see the opportunities, some challenges and approaches to successfully navigate through these new, warm waters. Helping companies like yours understand this topic is actually vital to our business. Why? Pirsonal makes hospitality’s marketing communications relevant to the individual to accelerate sales and increase engagement. We provide a state of the art personalized video marketing platform that helps hotels evoke a reaction from audiences of one, automatically. Named in the Top 10 Martech Startups 2018, Pirsonal is a trusted personalized video marketing partner to enterprise brands and SMBs, combining the power of multimedia personalization and marketing automation. We strongly believe that consumers require relevant marketing communications that make them react. Personal data plays an important role in the hospitality, travel, and leisure industry as larger volumes of personal data from guests are processed. This also represents a huge opportunity. CEO At Pirsonal It seems obvious, but it is not. They are not the same. Your audiences are constantly changing. They demand a unique approach according to their needs, experience and even budget. At least this is what data and our experience shows. A few months ago the world as we know it changed for a lot of hotel marketing, ecommerce and CRM managers. By interacting with them we learned that several of them are still in-shock because of the implications GDPR brings to their business. I remember a conversation I had with the digital marketing manager from a known hotel chain that told me that the following day after our conversation the chain board was going to decide if they would start their database from zero or if they would make the necessary changes to comply with the GDPR. That’s not a trivial decision at all! A few days ago I had another conversation with the digital manager for another known firm that stated that they didn’t really know what their email marketing conversions were. I’m not sure about your current situation, but I’m pretty sure you can agree with me on something: this is crazy! These conversations triggered something in my mind. We then decided to learn more about the implications a market shift like the GDPR has had for the Hotel Industry. At a glance, we INTRODUCTION Josías De La Espada 5 www.pirsonal.com
- 6. Hospitality and travel is a trillion dollar industry, which is highly competitive due to several marketing trends. According to a research by Triple School of management, the majority of travel and hospitality bookings are shifting from offline mode to online sources. Approximately, 53% of travel booking is made online. The most important hospitality and travel marketing trends with a strong market presence include: IMPACT OF GDPR • Mobile Marketing: Mobile customer experience has gained momentum in every industry, especially, the e-commerce industry. Furthermore, mobile has contributed around 94% of year-on-year growth in e-commerce traffic. When it comes to mobile travel and hospitality bookings, growth rates between the years 2011 and 2015 reported an increase of 1700%, accounting for 18% of online revenue. In addition, 21% of hotel bookings were carried out on mobile devices. • Increase in Expectation of Customers Personalization: In regards to marketing, it is important to offer a personalized experience to customers in order to grab their attention. Though irregularity of travel and hospitality bookings can indeed make this difficult, there are still many ways to personalize the experience. Some of the most effective personalization methods include the following: · Apprehension and leverage of social network data by instituting social logins · Personalize appropriate marketing messages by automating email messages, where we see an increase in the use of personalized video · Create a customized onsite experience, using information collected about a customer (booking date, check in information, preferences, etc.) · Make the customers feel unique and special through personalization All of the above will strengthen the effect of the marketing efforts. 1.1 Overview USD 4,4 BILLON USD 504 MILLON USD 175 MILLON RENUEVE PROFIT GDPR FINE FIGURE 1: GDPR Impact on Hyatt Revenue Source: The GDPR College 6
- 7. FIGURE 2: GDPR Impact on InterConti- nental Hotels Group Revenue RENUEVE PROFIT GDPR FINE USD 1,7 BILLON USD 68 BILLON USD 68 BILLON GDPR has strongly affected the hospitality, travel, and leisure industry due to the availability of huge amount of sensitive personal data collected by hoteliers, companies, and agencies. Personal data plays an important role in hospitality, travel, and leisure industry as larger volumes of personal data from guests are processed together with large number of payment card and/or loyalty card details. Precisely due to its sensitivity, the data used can have a major impact on guests if it falls into the wrong hands. In addition, the travel companies are also affected due to the personal and sensitive data they gather and process. For example, personal information collected as part of the booking process, including ‘special category’ (that is, sensitive) data such as health and medical data. Just imagine... The GDPR impact on revenue of some of the Hospitality industry could be: • In 2017, Hyatt went through a cyber- attack and reported that around 250 hotels across 50 countries were affected. Now, imagine the same cyber-attack under GDPR. The maximum GDPR fine is 4% of the global revenue or €20m (whichever is greater). Hyatt made USD 4.4 billion in 2016, with a 4.6% profit of USD 204 million. That left them with a GDPR penalty of up to USD 175 million. • In April 2017, the InterContinental Hotels Group announced that 1,200 of its hotels had undergone a Credit Card cyber- attack. In 2016, sales of USD 1.7 billion, a similar attack that affected EU citizen data could expose InterContinental to USD 68 million in GDPR penalties. 1.2 GDPR Impact on Revenue Source: The GDPR College 7 www.pirsonal.com
- 8. ty to improve their data security as they en- gage with prospects and consumers. • Focus on Social Media: Since email mar- keting strategies are shifting towards GDPR compliance, giving marketers an opportu- nity to focus on areas, which are not highly impacted, such as social media, SEO strate- gies, and content creation. The GDPR regulation’s key aim is to protect people’s online experiences. Marketers should not consider this regulation as a restriction to their brand, but as an opportunity to provide enhanced service and interactions with their customers. GDPR has created a significant shift, but it’s one that businesses and brands need to embrace. Brands need to focus on marketing to people, specially to individuals, rather than marketing to audiences. This is expected to result in, improved user experience to serve user preferences better. GDPR is not revolutionary or groundbreaking, though it simply supports the preference of the consumers. With the shift in focus from audience to customer, individualized marketing, businesses are enforced to think about marketing in an innovative way. This includes creating marketing campaigns that are catered toward an individual, reaching them with the appropriate message, at the right time and using the right medium. This involves investment, but once the people-centric strategy is integrated, marketers can unlock stronger results from their marketing than ever before. A marketer’s aim is to gain credentials, such as email, name, phone number, birthday, and others, of a customer to further use it for the promotional activity of a good or service, whereas GDPR’s goal is to protect the iden- tification information through data subjects control over their personal data. Though GDPR has some challenges for the marketers and many are intimidated by its implications for marketing, compliance also has several benefits. Certain benefits of GDPR for marketers are as follows: • Customers Trust: GDPR compliance is an opportunity for an organization to pro- vide secured and trustworthy service, and rebuild the trust that many digital consu- mers have lost. This eventually results in greater sharing of data. • User Experience: Rising GDPR enforce- ment and its data privacy controversies, companies such as Facebook, Wells Fargo, and Uber create advertising campaigns that attempt to put the user experience first. • Improvement in Data Security: GDPR compliance gives marketers the opportuni- IMPACT OF GDPR 1.3 GDPR Impact on Marketing results 8
- 9. Data is a valuable asset in today’s world, and though GDPR does create challenges in businesses, it also creates opportunities. In general, GDPR is expected to prove positi- ve for the internet, transparent, and more careful about collecting, storing, and using customer’s data. According to the Direct Marketing Association, the GDPR reduced outdated marketing data by 75% in 2017, and around 54% of companies felt the need for its adoption. In addition, before a year of the GDPR’s implementation, approximately 24% of businesses had no plan to deal with its implication. GDPR is forced for good, for marketers, and their agencies by bringing back creativity and creating content. This implication is ex- pected to root one’s back to what the brand is for. The main element to impact creative 1.4 Is Being Creative Going to Pay Back? agencies and their clients will be the collec- tion and handling of data. This is critical for agencies that are, both working on current projects with existing clients and sourcing new instructions from potential clients. It may include a range of data on who they are and their particular needs. The clients that eventually handle a substantial amount of consumer data are expected to witness the biggest impact of change. The creative agencies must ensure that they are entirely compliant with the handling of data, parti- cularly when any work or feedback that they receive from a customer may unintentiona- lly contain sensitive consumer data. GDPR aims to ensure the hotels, travel, and leisu- re industry to be more effective and run on factors such as trust, real relationships, and authenticity. 9 www.pirsonal.com
- 10. At present, communication plays an important role as it is used not only for business purpos- es, but also majorly used in our daily life. Moreover, in hospitality and tourism sector, com- munication is not only used between customer and staff, but also used within the staffs in the organization. The communication can be stated as transmitting information or exchanging message between two or more persons. The communication process can be done by using the method of performing word, tone of voice or body language from one to another person. Hence, it is important that a good communication process is carried out while corresponding. With the increase in mobile devices in the workplace and the compulsion that hotels maintain GDPR compliance, Bring your own device ( BYOD) policies have to reflect these GDPR com- pliance requirements. It is particularly important for the hospitality sector spreaded work- force, who will gradually rely on internal communications through a mobile team application. COMMUNICATION 1.5 The Most Used Communication Channels With Customers In The Hotel Industry BY TYPE Managers require complete and accurate information to perform their functions effi- ciently and effectively. If communication is not done properly, it can hamper the man- agement of the whole organisation. For in- stance, business planning, requires infor- mation on available resources, strength of competitors, government policies, and other external factors. Such information provides very important inputs for management to be able to formulate the right objectives and strategies to achieve its goal. To achieve all the above parameters communication plays a vital role. The most common forms of communication used in hospitality industry by type are: • Auditory Communication: Auditory communication includes messages that are received via hearing sense. It com- prises of music, words, sounds, and noises. In the hospitality industry, auditory commu- nication can be established through differ- ent media related to activity and objectives such as: by face-to-face communication, by phone call and radio broadcasting. • Visual Communication: This includes messages received through sight. Sign, gesture, and images play a major role while communicating. It also contains mediums, such as complaint forms, letters, invoices, contracts, labels, and leaflets. • Tactile Communication: This comprises of messages perceived through touch sense. Through tactile sensation, affection is conveyed. Shaking hands or tapping someone’s shoulder may show some positive or negative effects, so it is essential to be respectful in this context and be aware of cultural conventions. For example, greetings at meetings and negotiations are amongst the different mediums involved in it. • Multichannel Communication: These messages are received through various senses at a time. Television, video, and computer are few mediums through which this is possible. 10
- 11. BY ROI Return on Investment (ROI) varies from company-to-company and from region-to- region. Unvaryingly, the final decision de- pends on the company’s gearing and the investor’s risk profile. The average internal rate of return (IRR) for hotel investments in Europe ranges from 12.4% to 16.1% with an average of 14%. The majority of marketers believe that social media communication channel as a whole has helped their busi- nesses though they cannot quantify its ex- act impact. The benefits of incorporating a social media strategy include: • Increased exposure • Growing website traffics • Developing fan following • Generating sales leads • Rise in business partnerships • Advancing sales According to a survey of CMOs, the businesses are spending around 12% of their marketing budgets on social efforts. This number is expected to increase around 20% over the next five years. This is attributed to growing brands and their presence across multiple platforms. This survey stated: around 28% of market- ing agencies state, they struggle to meas- ure social ROI, 55% marketing agencies can measure social ROI, and around 17% mar- keting agencies agree that they can accu- rately quantify the revenue impact of social media. The major challenges related to ROI are: • Inability to tie social to business out- comes • Lack of analytics expertise and/or recourses • Poor measurement tools and platforms • Inconsistent analytical approaches • Unreliable poor/data BY SPENT Currently, the hotels technology spending is particular due to shrink in hotel’s IT budg- et. Hoteliers currently are focused to spent more on technology as compared to previ- ous years, approximately 3.5% of overall revenues were allocated to IT spending in 2016, a decrease with 6% in 2015. Hotels are now focused on enabling digital consumer engagement, with 52% aiming technology as their priority. Around 56% aims at driv- ing more direct reservations, and 56% con- centrating on improving guest analytics, as a top Business Intelligence goal. According to a 2016-2017 Gartner Research study, the companies are now spending around more than 12% of annual revenue on overall marketing. It stated that larger companies (more than 5 billion revenue) spend 13% of revenue on marketing, while smaller companies (USD 250 million to USD 500 million revenue) spend roughly around 10% of annual revenue. 11 www.pirsonal.com
- 12. COMMUNICATION 1.5 The Most Used Communication Channels With Customers In The Hotel Industry BY ENGAGEMENT Globally, the number of mobile device sub- scriptions is growing exponentially over the past period. In 2016, there were around 4.8 billion unique mobile subscribers, and 65% of the world’s population. It is estimated that there will be 5.7 billion mobile sub- scribers, representing a mobile phone pen- etration rate of 73%. The increase in usage of mobile device has transformed the travel and tourism industry, as travel bookings are majorly done through mobile devices. Consumer engagement has begun to shift towards mobile platforms, and global inter- connectivity of mobile devices makes them a suitable platform for commerce. Similarly, social media usage is rising. It is observed that, digital consumers are spend- ing more time on social networks and mes- saging platforms than ever before. It is thus important for hotels to have a brand pres- ence and a marketing effort on social me- dia channels, especially since social media marketing has proven to be more effective than traditional marketing (when utilized correctly). Social media marketing allows for two-way communication between consum- ers and customers. This interactive element helps companies hold a long-term customer. Moreover, social media marketing supports the real-time promotion of new products and services, all while processing consumer data that can be further used to target, en- gage, and grow a base of consumers. BY CONVERSIONS As the travel industry is growing continu- ally and becoming increasingly more com- plex, hoteliers are focusing for more inno- vative ways to engage and retain their best potential guests. According to Google, the online travel customer is exposed to over 38,983 micro-moments in any 60-day time- frame, through which they visit an average of around 18 websites via multiple devices in eight sessions before booking a hotel. The major factors impacting hotel website conver- sion rates include market parity, rate parity,and quality of website and user experience due to growing com- petition between the OTAs and Ho- teliers. On other hand, factors such as risk/investment, increase in choices, poor platforms, confusing offers, and ancil- 1400 1200 1000 800 600 400 200 0 NoofUsers(Millons) Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Source: HospitalityNet FIGURE 3. Daily Active Users on Social Media Channels over time Snapchat Facebook Twitter Instagram 12
- 13. The travel industry has below average conversion rates, ac- cording to data from Smart Insights. For travel and hospi- tality, the average conversion rate was 2.4% as compared to 2.6% for the retail. Though, for travel websites that depend heavily on affiliate metase- arch traffic, conversion rates are a bit higher, approximately above 4%. The factors influencing book- ing conversion rates include: • Price: this is a major factor, having competitive rates and providing better rate to book directly on website • Traffic Source: more appropriate the traffic, the higher is the conversion rate • Conversion rates by devices: approximately, 11% of bookings are made from mobile for brand-site, and 61% of bookings on mobile are through OTA mobile site • Conversion rate by location • Conversion rate by ADR and Rate Strategy • Website user experience • Conversion assistants: Widgets, A 15% increase in conversion can be expected • Trust: Reviews can help in growing the conversion rate • Service: Better service will encourage conversions, particularly if something unique is offered on website lary services are hampering the hotels con- version rates. The average hotel website conversion rate (bookings divided by unique monthly visi- tors) is typically below 2%. For example, imagine 100 people visit your hotel web- site. Out of which, less than two will make a booking, and more than 98 will look around before leaving to make a booking some- where else either with your competitors or with the OTAs. In addition, hoteliers are spending dollars on SEO, online media, paid search, PR, and social media to bring users to the hotel website. Though, 98% of them are not converting. On balance, it’s easier and inexpensive to generate more revenue from the existing traffic than to get more viewers to the site. Furthermore, attaining even a slight conversion rate increase can cre- ate a huge impact on a hotel’s bottom-line. 1,55% 1,67% 2,05% 2,34% 4,17% SEO TRIVAGO PAID SEARCH TRIP ADVISOR GOOGLE HOTEL ADS Source:Ecomeye 4,50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 6% 2 34% Source:Criteo FIGURE 5. Share of Bookings by Device 80% 60% 40% 20% 0% -20% -40% SMARTPHONE TABLETS (Mobile Excluding Apps) - Q4 2016 VS Q4 2017 DESKTOP SUPPLIERS OTA Source:Ecomeye DIRECT LINK SEARCH SEM DISPLAY ADS SEO OTA 1528 136 91 80 75 FIGURE 6. Bookings by Display Advertising (FASTBOOKING study of 2,000 Hotels Worldwide) 13 www.pirsonal.com
- 14. interactive relationship with their customers and obtain client email profiles. For example, approximately 192 million North Americans are active Internet users (Nielsen) and around 37 million have purchased travel online. The Internet offers a massive interactive, con- tent-rich media, and highly growing distribu- tion channel for the hospitality market. Email gets the most attention of any hospi- tality eMarketing effort owing to creation of direct revenue opportunities with past, pre- sent, and future clients. The email marketing strategy in hospitality makes competitive sen- se due to factors such as: • Personalization: offers personalized interactive relationship with clients, for example, with personalized video marke- ting. • Reach: functions as a sales force by rea- ching tens of thousands in seconds. • Protects brand integrity: enables promotion of the latest specials on a one- to-one basis to a pre-selected audience without broadcasting to the world the newest discounts. • Low cost: is an inexpensive form of acti- ve marketing. • Instant Gratification: people can receive, respond, forward, and print email almost immediately. • Rich Media: email marketing comes in various styles, such as e-Newsletters, text, HTML messages like a postcard or survey. The hotel gets its message across with Email marketing is an important element of hotelier’s direct online distribution and emar- keting strategy. Email marketing is used for both, direct response, and as a branding tool (short term, long term, and strategic goals). Email marketing helps the hoteliers to enga- ge their customers in a strong, personalized, and mutually beneficial interactive relations- hip and is an inexpensive form of traditional marketing. Major trends in email marketing in 2019: 1. Respecting personal data will change the email marketing strategy 2. Mailable ‘Microsites’ are adopted by more companies to increase customer research, engagement, and retention 3. Conversational tone is adopted for more personal interaction with audience 4. More business push for mobile-friendly design 5. Testing and deliverability need addres- sing further 6. Personalization and segmentation remain a high priority to continue sharing dynamic and engaging content EMAIL MARKETING AS A MAJOR COMMUNICATION CHANNEL Email marketing is amongst one of the vital components of the hotel eMarketing and on- line distribution strategy. The swing toward online buying, indicates that the website is becoming a key point of entry to establish IMPACT OF MARKETING 1.6 Trends in Email Marketing 14
- 15. color, sound, perso- nalized video, animation, whate- ver is most appropriate based on business goals. • Results: outcomes based, from knowing who opened the message, clicked on which links, how much time spent viewing each page, completed a transaction, or forwarded the email. CHANGES IN EMAIL MARKETING Email Marketing guidelines: • Have clear, explicit language a child could understand on the opt-in pages. Don’t hide consent in legalese. Dennis Yu recommends incorporating this language throughout the landing page, rather than trying to hide it. • Use GDPR compliant opt-ins. MailChimp has added GDPR boxes. LeadPages now has a GDPR consent check box. • Document you opt-ins. Screenshots could be your lifesaver if you ever do have to prove compliance. • Clean up your list. GDPR has an obli- gation for “minimization.” You can only ask for the minimum amount of data you need to provide your good or service, and you should only keep the data as long as neces- sary. Cleaning up your list is a good habit regardless. Dead leads give you inaccurate open rates. Go for an engaged list rather than a large list. 15 www.pirsonal.com
- 16. Establish how your organization deals with loyalty data The GDPR is a great opportunity for one’s company to review the way it processes and store data. Auditing the current methods is one of the best ways to prepare for GDPR. Under the current EU Data Protection Directive, only data controllers are liable for data protection compliance though, the GDPR places direct obligations on data processors too. Hence, it is important to know whether your organization is a data processor or a data controller, bearing in mind it could be both. For loyalty programs, it is necessary to document what personal data is being held, the source of the data, and who is it being shared with. It needs to maintain records of all your activities related to data processing from your loyalty program. GDPR’s accounta- bility principle requires organizations to be able to demonstrate their compliance with the principles of data protection imposed by the regulation. Know your existing customers consent It is mandatory to review how you record, seek, and manage consent and if any changes are required. In addition, one should know how a member signed up to a loyalty program, what are their permissions for communication, and if it is clear and transparent. If they do not meet the GDPR standard, existing consents need to be refreshed. Consent must be specific, freely given, informed, and not ambi- guous. A positive opt-in is required and consent cannot be implied by inactivity, pre-ticked boxes or silence. The consent section has to be separated from the rest of the terms and conditions. Simple methods need to be provided for individuals to take back consent. Loyalty programs are the most effective way of collecting consumer data, and acts as a result factor mainly in the new GDPR regulation. These programs are a source of data collection, which allow new functions and communica- tions to be used. Though, there is no need to completely revamp the program due to strong connection between loyalty and data. One can keep compliant by adjusting in current com- munication and opt-in and opt-out policies. This resulted in ensuring that members can only become (or remain) members of a loyalty program if they have given explicit consent for both your own organization and any third parties to process their personal data. LOYALTY 1.7 How Are Loyalty Programs Changing? 16
- 17. Examine your privacy notices Know individual rights One of the key takeaways from GDPR is the strengthening of rights for individu- als, including the right to be forgotten and data portability, which means you could be required to provide data to an individual that can then be taken to a competitor. Businesses are grateful to promote these rights, so it is important to ensure there are procedures in place to make this possible. This is particularly important when it comes to one’s loyalty program being compliant with GDPR. It is important to review the privacy notices currently in place and put in a plan for making any required changes before GDPR imple- mentation. When personal data is being collected for a loyalty program, one’s need to provide specific sets of information such as information pertaining to your identity and how you propose to use that information. This is generally done with a privacy notice. Know your requirements around privacy by design The GDPR requires you to provide some additional information in your privacy notices. This includes information, such as the exact provision in the law that permits asking for that data and retention periods for the data. It is important to specifically list that people have a right to complain to s Data Protection of- fice if they believe there is a problem with the way their data is being handled. The GDPR requires the information to be provided in the notices is easy to un- derstand, concise and clear. The GDPR turns privacy by design into a concrete legal requirement under the roof of “data protection by design and by default”. In some situations, it also makes “Privacy Impact Assessments” into a compul- sory requirement. The regulation defines Privacy Impact Assessments as “Data Protection Impact Assessments. (DPIA).” A DPIA is required whenever data pro- cessing has the potential to pose a high level of risk to individuals such as when: • New technology is being put in place • A profiling action is happening that can significantly affect people • Processing is happening on a large set of data 17 www.pirsonal.com
- 18. Hoteliers, airlines, and tour operators have been leading in many aspects of marketing. Hoteliers, airlines, and tour operators have been leading in many aspects of marketing as they are promoting loyalty programs, gen- erating apps, and storing data way before many. For hotels, it is important to offer their guests a personalized service. However, the OTAs can also personalize the experience of the hoteliers. The major marketing and sales channel of OTAs is online booking plat- forms and hence it is crucial for the hoteliers to match their profiles to their general strategies. One such example include, booking plat- form Bidroom.com. It doesn’t charge the hoteliers commission for bookings. Instead, the company asks them to offer a discount to the travelers. On the hotel’s profile, the administrator can actually choose the discount percentage and change it any time, even after it has been set. The hoteliers can also add and delete pictures, write their own descriptions and change the number of extra benefits, making their profiles more personal and adjusted to their business model. MAJOR REASONS FOR USING MARKETING INDIVI- DUALIZATION AS A STRATEGY The purpose of using marketing individualization strategy is for improving the customer’s experience and meeting his needs more effectively and in a lesser time. Thus, interactions between the company and the buyers are easier and the sa- tisfaction of the latter is increased. Currently, online retailers are increasingly seeking to offer targeted content to individual users, and personalization is becoming extremely important in the travel industry, owing to combination of vertical sec- tor and customer experience optimization expertise; hence, retailers are looking forward to help their clients to provide personalized offers to individuals for the long-term benefit of their customers and their marketing efforts. STRATEGY 1.8 Marketing Leaders using Marketing Individualization as a Strategy 18
- 20. Flight Centre Travel Group Flight Centre Travel Group accelerates its sales process by using personalized video marketing powered by Pirsonal. Every time a lead requests information, the brand automatically creates a personalized video, personalized landing page and custom in- video call-to-action based on the information provided by the lead such as name, reason to travel or destination, which makes these videos and emails totally relevant to each individual. This increased engagement moves leads to buy more and faster. Every personalized video is then instantly sent by email, which increases customer engagement and builds stronger relationships that translates into more revenue also in the mid and long term. This strategy is aligned with the personal touch of the company towards its customers through all communication channels. KLM KLM is a travel brand offering personalization across most of its digital marketing activity, such as it uses personalised emails to retarget customers that abandon carts online, allowing them to carry on the user journey from where they left off. In addition, one of its most innovative displays of personalisation has been iFly 50 – an interactive anniversary edition of its brand magazine. Though iFly usually provides reviews, inspirational stories, and general travel tips, but the 50th edition offered readers the chance to pick their five favorite destinations for the chance to win the trip of a lifetime. Striking imagery with an interactive user experience, is one such way of how to personalize content marketing. By giving the reader a reason to interact with the brand (instead of passively scrolling), it meant people would be more likely to invest and engage. EXAMPLES Of few brands adopting marketing individualization as a strategy: 20
- 21. Since, personalization can be effective during active processes, such as booking, researching, and travelling, Expedia’s campaign showed that it can also be a way to drive social engagement. For its ‘Travel Yourself Interesting’ campaign, Expedia gave Facebook users the chance to create a unique info graphic based on their own travel experiences, including information such as ‘total miles travelled’ and ‘number of countries visited’. The campaign followed on from a previous example that allowed users to create messages from luggage tags, thus with the help of such marketing strategy with around 15,500 people creating their travel profile in eight countries, the results speak for themselves. For Expedia, it was a chance to capture unique social data, which helped the brand to better understand its customers and inform re-targeted advertising. Virgin Hotels Virgin Hotels Virgin Hotels Chicago focuses on personalisation, with the brand using mobile technology to enhance the customer’s experience throughout their stay. According to the research study, more than 40% of travelers remain connected via their smart phones while on holiday, with 29% using it to stay in touch with loved ones and 24% using it to locate local area information. On this basis of this data, Virgin wanted to create a platform that would allow guests to personalize their hotel experience through their existing device. This resulted in a new app name ‘Lucy’ that allowed guests to do things like adjust the temperature in their room, stream content on hotel TVs, make external dining reservations, and so on. Apart from the typical rewards program, Virgin Hotels also launched ‘The Know’ – a preference program designed to create exceptional experiences. By filling in a questionnaire online, guests can choose what they’d like in their mini bar, discuss allergies, and even select a cocktail that will be waiting on arrival. This type of personalisation is hard to beat – and it means that hotel brands are able to compete with the intimate experience offered by the likes of Airbnb. By treating guests as individuals rather than a homogenous group, it also means customers are far more likely to return in future. 21 www.pirsonal.com
- 22. STRATEGY 1.9 When not to use marketing Marketing is amongst important element of all businesses today as it creates interest among potential customers for a product or services , and is crucial in today’s fast-paced digitalized world. There are several modes of marketing available, and has both, advantages and disadvantages. The primary disadvantage that can be attributed to marketing is money investment. It is not difficult to waste money with the wrong marketing plan. Not doing proper research before starting a marketing campaign involving advertising, using the wrong medium and thus trying to target the wrong section of people, can be an expensive mistake. Keeping low cost and doing extensive research earlier is thus extremely vital. With its low costs and large audiences, it’s easy to get carried away when using social media in any business. Marketers need to monitor trends that may impact the success of their marketing efforts: • Demographic shifts (aging population, the rise of millennials), and socioeconomics (cultural changes, economic decline/growth) • Political, economic, and geographic changes (emerging or declining economies) • Trip purpose (growth of multipurpose trips) • Psychographic changes (special interests, healthy lifestyles, sustainability) • Behavioural adaptations (free independent travel, decreasing brand loyalty) • Product-related trends (emerging niches) • Distribution channels (online travel agencies, virtual travel) Effective services marketing in the tourism and hospitality industry requires marketers to attain a solid understanding of the differences between the marketing of goods and services. Marketing is not recommendable without having a knowledge of the preferences and behaviors of their key customer segments. 22
- 23. STRATEGY 1.10 Customer Engagement Challenges for Marketings Professionals in the hotel industry Companies are increasingly recognizing the value of establishing close customer relationships. In the past, industry has gained a rapid growth and, at times, over-expansion of tourism industries. Currently, the hotel industry destinations have to address and overcome the challenges and threats resulting in the market developments and business environmental changes. Marketing in the fields of tourism, travel, hospitality and leisure industries is one of cutting edge and most challenging trend of recent years. Within the framework of “Experience Economy” in overall business environment and consumer behavior in particular, the task of offering unforgettable tourism experiences to visitors and guests is the most critical priority for all tourism-related businesses and destination marketers. The key challenges marketing professionals face for customer engagement are: 1. Customers are increasingly distracted: Customer distraction is the first major challenge that the hotel industry is facing repeatedly to convey the value of their business. The primary strategies to meet the challenge of customer distraction are persuasion, simplicity and relevancy. Simplicity is achieved by focusing the efforts on the customers’ scarcest resource. For example, one customer segment might be time, for another it may be mental effort. Individuals tend to find things simple that they do over and over again, if marketer can allied an already existing customer routine the chances are they are more likely to engage them. Relevancy is vital: Marketers need to be able to create customer-specific messages that are unique according to who every customer is, likes and expects. Personalization and multimedia play and important role to achieve a marketing that makes customers react. 2. Customers are focusing on new models of authority: To build trust in old forms of authority, such as politicians, academics, businesses, scientists , among others, have continuedtodeteriorationandintheirplacenew models of authority have risen. Encyclopedias are replaced by Wikipedia, Bank Managers are replaced by MoneySavingExperts and Travel Agents are replaced by Trip Advisors. The common element in many of these new authorities is building relationship and trust to offer long term value. 3. Increased expectations of Customers: If improved quality and new offers are not been provided, nowadays the likelihood is that their customers will quickly find someone else. Switching goods and providers has never been so easy for the customers. Although the importance of post-sales support is growing dramatically as the ability to augment discontent is now just one click and a Facebook group away. So meeting customers expectation is a real task for marketers. 4. Establishment of new Communities: Through the new sources of authority come new ways of connecting. The challenge for marketers in customer engagement is how to join the discussions within these communities without approaching across as outsiders coveting to disrupt the conversation. The language of customer-to-customer exchange is frequently difficult to learn and tough to meet business needs through. 23 www.pirsonal.com
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- 25. OVERVIEW Branding plays a major role for companies of all sizes due to the increase in market competition as it establishes a meaningful, differentiated presence that enhances an organization’s ability to attract and retain loyal customers and improves their market place. Big brands can lead to financial advantages through the concept of brand equity that the brand itself becomes valuable. In hospitality industry, reputed brands bring a lot of benefit to individual hotels, such as increased income, powered by brand recognition. Thus, resulting in high brand value along with increase in hotel value and have loyal customers. In the competitive hospitality industry, setting your hotel stand out in the crowd coupled with strong customer base is crucial for small, independently owned hotels as well as national chains. This can be achieved by making smart choices related to product type, branding activity, and a marketing relevant to the individual, not only to a general. STRATEGY 1.11 Marketers that use Marketing Individualization Vs. those who don’t, from an ROI perspective Currently, with growing innovative technology, almost any type of media can be personalized, from homepages to email copy, sales funnels to personalized video, recommendations to loyalty discounts, depending on the objective and amassed data points. Across the customer lifecycle, a savvy marketing personalization strategy may deliver an unmatched ROI that makes a major impact on the bottom line. For example, in-house marketers who are personalizing their web experiences see on average a 19% uplift in sales, email marketing regularly sees a whopping 440% ROI when implemented effectively, or 44 dollars for every dollar spent, and personalized videos deliver a CTR that is higher than that of generic video by 164% as well as a 116% uplift in conversion. In addition, 94% of customer insights and marketing professionals across multiple industries focus on meeting their current marketing objectives. Individualization plays a major role: Around 88% of U.S. marketers reported seeing measurable improvements through personalization with more than half reporting a lift greater than 10%. Customers now expect a personalized experience and consciously line up their brand loyalty with the extent to which they feel ‘known’ and valued as a customer. Communicating content that is not targeted is a waste of time and effort since irrelevant content generates 83% lower response rates. If personalization marketing is not done, you are spending your time and effort on initiatives that do not work, and will create a negative impact on customers. 1.12 Branding in the Hotel Industry 25 www.pirsonal.com
- 26. GUEST ARTICLE All that glitters is not gold for Hotels on Digital Content. 30 minutes before the meeting, Frank's team was proud to deliver a keynote presentation with top-notch content polished for weeks. Frank worked extra hours with them giving vision and expertise to the new Digital Content Strategy plan. But this little splinter in his mind that didn't let him sleep now has become a tingling. He entered the meeting room with confidence and introduced everyone the new plan. In Pattterns, we have observed that most hotels make critic decisions based on intuition and past experiences. There is an obsession with the most viral publications, campaigns, and influencers of the industry. When it comes to extrapolation, who gives guarantees? - Nice job with the presentation, Frank, but I have some questions for you- said Burns, CFO of the brand. Which is the ROI of this? How could all this push online reservations? How can we measure attribution? How could... - Yeah! And first of all, what part of this will make us different from any other hotel? This trend is what every competitor is doing now or is about to do- interrupted McLure, the GM. Frank's tingling is now a cold drop of sweat in the back of his neck. The underlining and essential question is: What's the foundation of your strategy? In Frank's opinion, there's nothing that could prove wrong his plan, but for the committee that is not enough. Are you relying on something solid or just intuition? Increasing Content Strategy budgets need bigger assurances. We are in the era of information, we need to make data-driven decisions. It's been two weeks since the meeting, and Frank has no answers yet. The new deadline is in five days. He overlooked his Social Media and web analytics dashboards. It only gives him a cold feeling, but not a clue about where His hands began to sweat an ocean. He moved his head from one person to another reaching for allies, but even his better options were looking at their own papers, not wanting to pick a side. All the executive committee of the hotel had questions. Legiti- mate questions. And each one could kill his career in the brand. 26
- 27. is the heat coming from. Every statistic seems now superficial when he thinks about creating something new to confront the committee. Their questions are continuously tolling in his head, formulating new ones. What if I could identify variables, trends, and behaviours? What if I could trace down our potential guest digital journey? What if I could transform all our data into tactical evidence? Sure, turning Data Analysis and User Behaviour Analysis into easy visual information will help us make decisions and discover new opportunities, but that's something that goes beyond the traditional industry analysis and superficial rankings of the competition. We’re Pattterns, a creative research team located in Spain. We’ve been more than 6 years creating digital content for international brands at agencies, and for a long time, we have seen how many companies invest in Digital Content having only superficial knowledge about their digital competition landscape. That is why we came together as a dedicated team with the purpose of going deeper. After a lot of experimentation, we pride ourselves on developing unique and professional reports based on Content Mining and Data Science. We want to introduce to you 'Instagram for Hotels.' Thousands of Instagram pictures published by hotels analyzed with Image Data Science. Build your Content Strategy based on the most extensive and powerful research on Instagram of the U.S. Hotel Sector. Let’s change how we see Business Intelligence. Improve today with data. 27 www.pirsonal.com
- 28. TALK TO SALES: US +1 (914) 336-4549 EUROPE +34 (912) 485-775 [email protected] For more information, visit pirsonal.com Pirsonal makes hospitality's marketing communications relevant to the individual to accelerate sales and increase engagement. We provide a state of the art personalized video marketing platform that helps hotels evoke a reaction from audiences of one, automatically. Named in the Top 10 Martech Startups 2018, Pirsonal is a trusted personalized video marketing partner to enterprise brands and SMBs, combining the power of multimedia personalization and marketing automation. ABOUT US