Monday, October 28, 2013

Marketing & Customer excellence: how could the Indian hospitality industry potentially get to the top of the world...


As I just returned from a 10 days trip though India, I got to stay in various hotel and realized that the Indian hospitality industry holds a very unique key to being the best model in the world. Having worked for a few hotel groups around the world (from Intercontinental to Starwood and Marriott), I couldn’t help myself , everywhere I would check-in, from having my brains in professional mode when it came to customer experience & hotel management : despite a few key areas of improvement, I realized that the hospitality groups in India (Oberoi, Taj, Leela etc...) could potentially possess the most powerful & winning combination of art & science when it comes to Customer satisfaction and could inspire many other service industries (airlines, banking...) in the quest for Customer Service Excellence.
However, at a time of economic pressure , less-than-expected growth in inbound travel, devaluation of the Indian rupee against the US dollar  and room supply overshooting demand, the need for India’s hospitably  industry to better structure & optimize its revenue structure & operations is pressing whilst its inherent superior assets could be better utilized...


 
First, focusing on the assets that have been mastered:

1.    Beauty : they generally own or build /operate magnificient palaces: from a Maharajah palace in Rajasthan  to an utra modern building In Mumbai or a renovated boutique Haveli in Chennai, how many countries can boast so many real estate treasures per km2 ? These gems are generally located in gated areas that offer an oasis apart from the surrounding bustle & hustle. Even for the most recent constructions, there is a clear resolve to reminisce of a past splendor & architecture, sometimes with success, but always with lavish materials & volumes...These groups rarely go stingy on land, marble, flower arrangements,  plush fabrics or antique furniture in a country where these supplies and best artisans are available at a very reasonable cost...

 
2.    The Indian culture of hospitality is a tradition and comes from the heart: based upon the Sanskrit saying “Atithi Devo Bhava  meaning "the guest is God", this fundamental principle of Indhu culture is shown in a number of stories where a guest is literally a god who rewards the provider of hospitality... The word ‘Athiti’ defines the guest as a person who could show up at home without a prior notice or formal invitation and on a day and time of his own choice...This is a defining trait of the Indian identity and still engraved in modern India.
 
3.    the importance of traditional / old-world good manners, dedication & humility : probably influenced by the 200 years British rule, both fair practice of English & sense of proper etiquette are more common among all classes of personnel that in many other countries, let alone other former Commonwealth nations such as Canada, Australia or in Africa...But more importantly, you get the sense that “Yes. Sir”, “certainly” or “You are welcome” are truly meant: that, when anybody addresses you, they don’t -and shouldn’t- feel inferior or demeaned by their show of respect & humility but rather expecting the same from you: it’s a win/win relationship ! Now, try picturing this in France , Mexico or Brazil, or even the USA, you soon realize that the general sentiment & attitude would be quite different, whatever the training & corporate policies in place. Another reason might also be that, for most Indian employees at almost every level, their job in the Hospitality industry is a real career choice and true social accomplishment not a simple gig between two jobs in order to pay the bills... this is probably why it makes sense and is profitable in the long term for Indian based hospitality industry to invest so heavily at every level in training for staff that will generally stay with the company for years or their entire career unless they cross over to the competition... That’s no coincidence that, for instance, The Oberoi Centre of Learning and Development (OCLD) was established almost 5 decades ago and has management training programmes that are considered among the best in Asia and a benchmark for international excellence within the hotel industry.
 

However, despite these very unique qualities, I also found  that beyond these irreplaceable assets in the art of hospitality, some other areas & more technical skills in the science of the trade seem to be missing in action or underutilized...At a time when many Indian joint ventures with Western groups are dissolving under the economic pressure that the country is going through, a pro-active charting & consolidation of these strategic skills could help Indian hospitality groups grow more efficiently by unleashing more profitability and  an optimized customer experience , helping to consolidate what could become the most powerful marketing mix in the global hospitality industry landscape:


 

 

1.    Customer Relationship management:  analytics, technology & marketing utilization: whereas most of American hospitality industry has learned in the past 5 years how to fully harness the power of segmentation & analytics when it comes to identifying the most profitable customer groups & the respective drivers of their satisfaction (rewards, personalized perks, discounts & promotions etc...), it seems that very few of these tools are actually formatted and brought to hotel’s front office employees so that it can inform their interactions with each customer: where is  the Customer Acquisition & retention strategy ? In a market that caters to so many different types of clientele –from experiential travelers who want to experience the country by themselves to segments like MICE , leisure, honeymooners, junket , Adventure or religious tourism...- how do you make sure that you properly identify, target & retain the most profitable / valuable segments , address customer pain points & moments  of truth for each brand while avoiding cannibalization within  the same portfolio...? Where is the Customer loyalty framework for Heritage or value segment customers when it comes to establishing a long term relationship & dialogue with a new guest after their first stay ? Where are the specific offers or advantages that will nurture repeat and brand preference ?  Where are the data related to a customer’s history & profile when it comes to anticipating their personal preferences, habits & expectations so that , whatever the personal memory or talent of some specific staff, they always feel welcomed & recognized as valuable & individual guests rather than a sheep among the herd ? All things that the global Airline industry, rental car or some US-based hotel chains have long scaled in order to maximize revenues & their share of Customer Lifetime Value...For instance, SAS, the Scandinavian airline, which uses its CRM systems to identify all the passengers who are flying on the airline for the first time, build a profile of the customer using social media and other third-party information: when the customer checks in for their flight, they are given a small gift based on what the airline learned about them.” A person whose social media feed indicates an interest in athletics might be given a sports bag, for instance...

 
It’s telling that, after staying as a guest in 10 different hotels belonging to various International chains, I was never exposed nor prompted at no time to enroll (from booking to check-in to after stay...) in any loyalty program or club ! How do you keep the positive memories of my stay alive and capitalize on the magic & unique experience that I just went through ?? Where are, beyond the one email offer for discount to the same hotel (how am I likely to soon return to India from the US and in the same Rajasthan hotel ? ) rather than making me a concrete offer for an hotel on the continent of my residence...?

 

2.    Empowerment/flexibility in decision making: both a result of training but also better suited tools and customer intelligence availability, the capacity of customer-facing managers (food & beverage, Spa, rooms..) to better predict, track & manage specific customer preferences or expectations can make a difference in the efficiency of day to day operations as well as in the delivery of an appropriate experience...But for that to happen, there is also a deeper need for staff & managers to be AND feel empowered so that they can adapt to real time situations or requests and react on the spot - as it is generally the case in European or American hotels- by making the appropriate judgment call without having to go to their direct report below a certain stake level...

That’s where the right balance between established procedures and adaptive judgment /flexibility needs to be taught on the basis of specific examples and situations...This is how junior employees & managers will strive, grow and acquire the customer centric mindset & adaptability that generally help better motivate & incentivize teams but also deliver better customer satisfaction at every level of the organization. There might be a cultural shift & adaptation here for Indian personnel that will only happen with the right user friendly tools but also with the right training...Radisson Hotels were known as one of the first to initiate a full scale employee empowerment by removing the upper layers of hotel management and allowing levels of middle management & front line employees more power in the decision making process: with decentralized management, some selected employees were encouraged to deal with situations using their own initiative and creative thinking with customer satisfaction within a preset amount of budget autonomy, still being held accountable for the bottom line at the end of the day.

 

3.    More assertive brand buzz & leverage of social media: if, as a US based traveler, I have acquired through other countries a distinctive awareness of some of the  top Indian hospitality brands such as Oberoi or Taj, I am stunned by the fact that these global brands don’t seem to be building , as other Luxury , lifestyle or Airline brands regularly do , much exposure & brand equity in European & US markets by conveying the special story of their fine quality & differentiation...and I am not talking about a 1 page featuring a property in a few international magazines, I am talking about a “wow” real media-to-event marketing program with partnerships that tell the tale of the magic & soul of India’s hospitality, there is much to be done either online or offline around that kind of material... Beyond the advertising storyboard, the fabulous profiles of historical properties or destinations could provide an incredible content to a more aggressive P.R. offensive through editorials. Even basic exposure would also make a difference through targeted online display on key travel websites such as Hotels.com, Expedia or Agoda at a time of booking, which I never got.Beyond communications, internet analytics can provide a wealth of customer intelligence that could feed into a refined /pro-active Customer segmentation & loyalty strategy to tailor messages & more personalized offers or packages as well as providing more readily accessible insight for hotel staff in terms of their guest’s preferences or interests (informing them about yoga class, food experiences or local excursions...). When it comes to leveraging the power of social media, I found that very few Indian hotel chains have their own Facebook page to communicate or engage with fans or those could become most active brand ambassadors... While more & more Internet savvy Indians book their hotels online  and India is the second market after the USA in terms of Facebook users with more than 62 millions, nothing seem to indicate that much of the attached analytics are being mined & gathered by marketing hoteliers to complete a customer’s DNA profile  and help design more targeted offers...When it comes to Twitter, many American hotel brands are utilizing the social media channel to reinforce their brand image and to communicate directly with their guests on a more intimate & timely basis. In the USA, Bill Marriott was one of the first CEOs to jump onto the Social Media bandwagon when he started his 'On the Move' blog in 2007...From Starwood to Hyatt or Ritz Carlton, many hotel brands maintain & promote their own Twitter pages to provide concierge services, updates on hotel properties or responses to specific questions from guests...

 

Last but not least, I found -maybe telling of the digital maturity of India’s hotel chains – that very few, even five star – of the hotels still don’t offer the basic courtesy of complimentary in-room first 30 mn for their guests to check their emails whereas it has long become, like cable TV or A.C., a commodity & necessity in the rest of the world for most business travelers...

In conclusion, with the current slowed growth that it is going through, maybe it’s time for India’s hospitality industry to rethink some of its strategic skills & upgrade its approach & tools when it comes to their Customer strategy, Service Excellence & delivery. It will be even more crucial to the growing trend of Internationally-branded, mid-scale offerings and value segment  which are more & more required by both domestic and international travelers...For that to happen, the best of traditional Maharajah style hospitality will have to incorporate an innovative 21st century strategy & its marketing tools that the population of Modern India & the digital age have already adopted.

If that happens, India’s hospitality industry might be in a position to become the most qualitative, competitive & efficient on the planet...!  
 



Sunday, July 28, 2013

BIG DATA vs SMART DATA: the next BIG shift of strategic marketing

Big Data is the biggest game-changing opportunity for marketing and sales since the Internet went mainstream almost 15 years ago.Big Data refers to any data sets which are so large and complex they are difficult to manage using traditional methods and software. This includes anything from medical records and military surveillance to the results of the Large Hadron Collider experiments. Today’s channel-surfing consumer is comfortable using an array of devices, tools, and technologies to fulfill a task Understanding that decision journey is critical to identifying battlegrounds to either win new customers or keep existing ones from defecting to competitors: therefore, organizations face overwhelming amounts of data, organizational complexity, rapidly changing customer behaviors, and increased competitive pressures. At the same time, the explosion in data and digital technologies has opened up an unprecedented array of insights into customer needs and behaviors. Those that use Big Data and analytics effectively show productivity rates and profitability that are 5 – 6 % higher than those of their peers. McKinsey analysis of more than 250 engagements over five years has revealed that companies that put data at the center of the marketing and sales decisions improve their marketing Return On Investment (MROI) by 15 – 20 %. That adds up to $150 – $200 billion of additional value based on global annual marketing spend of an estimated $1 trillion. Conversely, companies who miss big data opportunities of today will miss the next frontier of innovation, competition, and productivity. Analytics  & measurement have become more and more of a priority because every shareholder, CEO, and VP on the planet wants to make better decisions. Because of this, the business analytics market continues to innovate and grow at a solid rate big data can lead to better marketing through BIG testing: the key to better, more pragmatic marketing is actually the embrace of marketing experimentation as a driver of continuous innovation: new technology and new talent allow to start creating hypotheses. Then to use Big Testing to prove them out – right or wrong. The fundamentals of marketing remain the same, with the aims still being to build your brand, create awareness, and encourage trial, repeat purchase, preference and advocacy.So make sure your team has an excellent grounding in the old ways and an appetite to deliver them in new ways.

BIG data is now happening BIG time: What the ‘Big Data’ marketers are concerned with is mainly the digital content that’s being created at a phenomenal rate that you can use to gain insights into your customers.Think YouTube videos, social media platforms, Facebook Likes, Instagram photos, instant poll results, LinkedIn group discussions... It's even been called 'the sexiest new marketing tool around'.There’s now so much information available about customers that innovations are emerging to handle these disparate forms of data. It's imperative for marketers to understand these, in order to stay successful in the shifting digital landscape. It means that there are novel opportunities to deliver targeted customer experiences based on in-depth insights. This will enable businesses to develop relationships with customers and keep them engaged over the long term.Destination marketing is key when marketers start their Big Data projects by thinking of the end goal and then working through all the details. This so-called “destination thinking” helps the strategic marketer avoid the traps of many Big Data Marketing projects where the deliverable becomes the end goal itself instead of the business value imagined at the outset...
Although it’s mostly scientific , there is a specific art to approaching BIG data: leveraging actionable insight, customer segmentation is a good structure to start with , esp. when you merge attitudinal with behavioral: so if you apply the same sorting/logic of organization to social media, mobile or retail, you will keep a model that’s rich and can actually serve as a pillar of your marketing strategy & competitiveness...Example: collecting the likes on FB might be as rich in potential growth as the actual clicking on suggested links; understanding the questions that our customers are asking when they do a Google GOOG +0.07% search, visit a website or participate in a social media conversation... Start with the consumer decision journey : understanding that decision journey is critical to identifying battlegrounds to either win new customers or keep existing ones from defecting to competitors. Some 35 percent of B2B pre-purchase activities, for example, are digital, which means B2B companies need to invest in web sites that more effectively communicate the value of their products, SEO technology to make sure potential customers are finding them, and social media monitoring to spot new sales opportunities. One online retailer, for example, tailors its offers and discounts based on predictions of how likely a valued customer is to defect...
...and there also are some hurdles/risks to Big Data: obviously,  privacy is a primary one: with the recent outrage with the IRS scandal and big brother NSA revelations, American consumers might become more & more nervous about either Governmental or private entities mining & manipulating tons of personal information, even if it’s for straight commercial purpose: so give them clear/transparent information and let them decide how far they want to have their data utilized: most of them will not mind as long as they have been asked and feel in control of the level of privacy they set for themselves...That’s partly what Facebook had accomplished under pressure in the past 2 years...but failed to capitalize on after their collaboration with NSA was exposed during the scandal...

The field of applications in sales & marketing is huge: to start with , Retailors for whom it’s more strategic than any other industry because it’s reshaping their entire business & operating model: Walmart is using big data from 10 different websites to feed shopper and transaction data into an analytical system. Sears and Kmart are trying to improve the personalization of marketing campaigns, coupons, and offers with big data to compete better with Wal-Mart, Target, and Amazon. As the leader in the space, Amazon uses 1 million Hadoop clusters to support their affiliate network, risk management, machine learning, website updates, and more
More importantly, there is seamless commerce- also called  omni-channel- form of retailing, which lets consumers move seamlessly among all retail environments -- real and virtual -- as if they were one, will be the norm. For exampleH.H. Gregg and Jo-Ann Fabric and Craft Stores let their consumers check inventory by store, buy online and pick up the product at their chosen location. Restoration Hardware makes its stores into brand showrooms, where consumers can handle and test products while shopping the chain’s vast online catalogs and website. WalmartLabs is mining SoMoLo (social, mobile, local) data to predict shoppers’ next purchases and stock Walmart.com based on social-media activity.
It may seem like a simple task, but unifying the focus of a Fortune 500 retailer or manufacturer along these lines is a complex undertaking. First, you have to prioritize among hundreds of possible initiatives. Then you have to rethink the customer experience across channels and devices, and build the communications web to bring it together, from conference room to showroom. Within the organization, you need to break down functional silos and create incentives for different departments to share data and sell products from every channel.
Most retailers may have begun to adjust, with improved customer-service policies, new mobile features or updated product-delivery options, but they are still largely missing the mark. Still, several of the world’s most innovative chains are closing in on the ideal. Nordstrom’s, Best Buy, Macy’s, Urban Outfitter, Staples and Restoration Hardware are beginning to make the organizational transitions needed to develop a consistent experience for myriad types of shoppers.
Led by the belief that this is the future of retailing, these chains are uniting retail and e-commerce teams with one leader, integrating technology systems to act as one, seeking a unifying goal for the business (not the channel). Instead of year-over-year store comps, they’re measuring the combined impact of communications and sales across all channels. In stores, they’re adding quick pickup counters for online purchasers, training staff to handle instant checkout via smartphone and tablet and gathering data to personalize the shopping experience.

Consequently, this Big data  shift has interesting repercussions for the marketing consultants & partner agencies of advertisers: just as consumers can't be bothered with disconnected retail channels, retailers don’t want to juggle a dozen consultancies to accomplish something they’re too tied up to do in-house. They need partners capable of going from roadmap to results in a matter of months. So they’re starting to ask agencies to do things that Don Draper never imagined would be part of the scope of work. For starters, we have to help clients think through business policies, aspects of store layout and customer service. It doesn’t serve the business to cruise consumers through an elegant online experience -- picking out the products, finding the stores, checking inventory and making the purchase -- only to stick them at the back of a customer-service line when they enter the store for pickup. The hassle is amplified by the angst of people waiting to return faulty items. So we need to help wrangle with questions likes these: Do we have designated spaces in the parking lot for people who bought online to pick up in-store? Do we have a dedicated pickup counter? Are we engineered to make ordered items available for pickup in less than 20 minutes? Do we have cabinet space for all the products that are awaiting pickup?  Do we allow customers to return endless aisle products to a store location, even though they were purchased online? If so, how is that product returned to inventory? 

Other industries like Financial services are also leveraging Big Data for their product development: Morgan Stanley ran into issues doing portfolio analysis on traditional databases and now uses Hadoop to analyze investments “on a larger scale, with better results.” As well, Hadoop is being used in the industry for sentiment analysis, predictive analytics, and financial trades.

In Automotive, Ford’s modern hybrid Fusion model generates up to 25 GB of data per hour. Why? The data can be used to understand driving behaviors and reduce accidents, understand wear and tear to identify issues that lower maintenance costs, avoid collisions, and even confirm travelling arrangements.Insurance companies such as Progressive actually turn this kind of data into action to target various customer segments with appropriate, fine tuned  premiums & coverage solutions...

In the Entertainment industry, companies like Time Warner, Comcast, and Cablevision are using big data to track media consumption and engagement, advertising, and customer retention as well as operations and infrastructure. The video game industry is using big data for tracking during gameplay and after, predicting performance, and analyzing over 500GB of structured data and 4 TB of operational logs each day. Even brands like ESPN are looking to get in on the action.

The Hospitality or Travel industry have embraced big data for a few years , enabling them to go beyond the traditional analytics of customer loyalty metrics: British Airways is doing more to remember personal preferences with its “Know Me program” that can, for example, spot when passengers choose window seats for short-haul flights and aisle seats for long-haul flights because they want to stretch their legs, and that pattern can be repeated automatically. "They're combining everything they know about passengers, and historically that sort of information has been very fragmented across a variety of system," said Davenport. "They're also bringing that information to the front lines -- even to the cabin crews using iPads -- so it adds up to an impressive effort." Multiple airlines are pushing revenue management to the next level by calculating, for example, the value of a group of customers who will miss a connection due to a flight delay and then determining whether to delay their connecting flight or book them on the next plane.Travelocity applies analytics to pricing, inventory and advertising, and all three dimensions shift on a daily basis depending on supply and demand. It's using techniques like look-alike modeling, next-best-offer analysis and recommendation engines to push the right offers to customers that fit certain profiles.

 

All these examples show the multiple and deep repercussions  that the BIG data revolution is opening: companies that understand that next necessary stage of customer centricity transformation on the heels of the digital revolution will be able to yield invaluable insight,  innovation  and competitive advantage for years to come...This is BIG !