How Hotels can use the Social Web to build Loyalty

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  • Brad Benton
    Keymaster
    Post count: 148

    The question of how to drive revenue growth has existed since the first hotels began experimenting with social technologies, and the need to measure impact has only increased with time. As we prepare for 2012, hotel executives are looking for new ways to do this – and stay ahead of their competitors.

    At many organizations, the bulk of social media sales and marketing efforts we see are focused on acquiring new customers. But I believe a bigger opportunity exists on the social web. Insights from customer-created online content can be used in every department and job role. And interestingly, one of the biggest opportunities for driving revenue growth in social media seems to lie in building loyalty: encouraging guests to come back again and again.

    As we’ll see, the social web presents us with an ideal platform to conduct activities that address all the core elements of building loyalty: creating positive first impressions, delivering extraordinary service, and cultivating relationships over time.


    Why is loyalty important?
    Recent research from the CMO council made the impact of loyalty on profitability very clear.

    •Acquiring new customers can cost five times more than satisfying and retaining current customers.
    •A two percent increase in customer retention has the same effect on profits as cutting costs by 10 percent.
    Additionally, a report from Bain & Company found that people that engage with brands in social media are more likely to form an emotional bond with those brands, spending 20-40% more than other customers.

    Since so much money is at stake here, it begs the question….


    How can hotels use the social web to build loyalty?
    Caroline Cooper shared helpful suggestions in her recent article, “Ten Tips for Retaining Loyal Guests.” I’d like to expand on a few of her points, showing how hotels could use the social web to encourage that loyalty.

    Understand guests’ needs – this can be done on both a micro and macro level with social media and review analytics. Monitoring the social web for conversations around your hotels or other relevant topics – such as your city or current events – provides insight into what travelers are looking for. Following up with specific individuals through Twitter can uncover specific opportunities for service.

    Scott Zimmerman calls this concept “Engagement Communications”:

    “Engagement Communications applies high technology communications in a way that creates a personal, human touch. These ongoing two-way dialogues with customers not only make a connection, but inspires them to take action. They also provide a constant feedback loop that gives companies deeper insights into their customers’ motivations and needs, and offers the opportunity to react in real time.”

    Real-time social networks like Twitter, Facebook, and Foursquare provide an ideal platform for engaging customers in a way that helps you better understand their needs.

    Taking a step back and looking at all these conversations in aggregate can help you 

    understand market needs by identifying recurring themes. By monitoring both the topics mentioned and the overall sentiment of consumer-created content, you can deliver more meaningful experiences – and create more effective communications.

    Know your competition – Understanding guests’ needs can also be done with a little competitive analysis. Social media and review analytics provide hoteliers today with unparalleled competitive insight. The concept of online reviews acting as a “24/7 virtual mystery shopper” applies not only to your property, but the hotels you compete against.

    With the right listening tools, you can keep close tabs on competitors, and identify areas of comparative advantage for your property. Promoting and enhancing what guests appreciate most about your hotel relative to the competition can be a powerful way to maintain loyalty and build competitive advantage.

    Ask for feedback – both offline and online. Asking for feedback – and then acting on that feedback – makes guests feel they have input in the way you run your hotel. Plus, it gives you more information to work with when using review analytics for management decisions.

    A best practice I’ve seen managers use is asking guests at checkout how satisfied they were with their stay. If there was any issue that needs to be resolved, it can be dealt with before the guests leave. If everything was great, you have the opportunity to ask them to share that online with others. (Encouraging more online reviews.) 

    Get the basics right – Loyalty and trust is built through consistently delivering on your promises, time after time. Predictability is crucial for building loyalty. Nothing turns people off faster than experiencing great service the first time, only to be disappointed the second time.

    How do you provide predictable excellence? For most organizations, this requires planning the customer experience, developing a mix of systems, procedures and tools to ensure great service time after time. 

    Getting the basics right also goes back to understanding what expectations you are setting. Creating a presence on Facebook and Twitter creates the promise of delivering fresh content – and being there to support customers if they need it. Avoid starting with a flurry of activity, only to go silent when you find you have not dedicated sufficient resources to that platform. It’s like giving out a customer service number and not having anyone to answer it.

    Wow your guest – In the end, what gets guests talking is the “wow factor.” Something remarkable and out of the ordinary.

    An award-winning example of this was how KLM airlines used Twitter to provide surprising service. They monitored Twitter activity for people in the airport terminal at the moment, scanned their profile for keywords that would identify interests, and then gave customers a gift they would enjoy. (See the video here.)

    Andrew Grill wrote about an experience he had in the hotel industry – a Twitter exchange with the Intercontinental Mark Hopkins in San Francisco. After a few back-and-forth messages with their social media manager, and he was upgraded to a room with free internet access ‘to help him tweet’….and received this note:

     


     

    Taking this approach requires powerful listening tools to catch opportunities for delivering “wow” service.

    Keep in touch – cultivating relationships over time. Since the majority of your social media followers are unlikely to stay at your hotel each week, publishing information that they would appreciate is one of the best uses of social media. You can provide an inside view of your business that builds relationships and trust. In an article for Social Media Today, Pervara Kapadia talks about this in the context of offering “Privilege and Belonging”:

    •Privileged Feeling
    ◦This could be done by giving them great discounts and sales information.
    ◦You could let them have the first peek at new products being offered.
    ◦Let them be the first to know what is taking place behind the scenes.
    ◦If there is a new announcement that you will be coming out with, let your Community know first.
    •Belonging Feeling
    ◦Encourage customers to speak and to share.
    ◦Let them know that they are a part of your Family.
    ◦Let them share their experience with your product.
    ◦Appreciate a good comment. Make it a point to address a negative remark.
    As we prepare for 2012, experiment with using a mix of these activities to focus on growing revenue from repeat business. Cultivate a loyal fan following of customers who not only come back again and again – but tell their friends and do the selling for you.

    Each of these steps: Understanding customers, consistently providing WOW service, tracking performance and gathering competitive intelligence requires a robust social media technology platform

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