Customer relationship management (CRM) software has become a mainstay of many e-commerce businesses, as a way of analyzing guest behavior to predict desire and intent.
But the hotel industry has been slow to settle on a CRM tool that it likes. So the market remains fractured.
The gap is seen as an opportunity for Cendyn, a provider of B2B technology for marketing and event management for hospitality businesses.
It’s been a busy 12 months for the Boca Raton, Florida-based company, whose products are used by approximately 30,000 hotels in 143 countries.
In the spring, private equity group Accel-KKR acquired a stake in it. Cendyn has been using the funding to hire staff and open eight additional offices in Europe and Asia-Pacific. The company has been rumored to be on the lookout for strategic acquisitions in the US.
The company reorganized as well. For two decades, Cendyn separated its products the way that hotels do, on base market segmentation. But now it has consolidated.
This summer it rolled out Cendyn Hospitality Marketing Cloud, which it calls an integrated technology platform for driving sales and marketing performance. This new suite reflects the company’s evolution into a cloud-based business that has merged separate companies Cendyn/ONE and Cendyn Arcaneo.
Cendyn/ONE is a solution set for driving transient leisure bookings and repeat engagement through a CRM with integrated data-driven digital marketing, loyalty, and guest engagement.
Meanwhile, Cendyn Events is an updating of the Arcaneo product the company gained via its acquisition of Ovations a year ago. It serves meetings, management, and hotel sales.
By moving its tools to a software-as-a-service model and by unifying sales and marketing tools, Cendyn believes it now has scale and product-market-fit to sell (and cross-sell) globally and to add new applications that plug service gaps.
To find out more, we recently sat down with chief sales and marketing officer Tim Sullivan.
Tnooz: Why is the US market for hotel CRM so fragmented?
Sullivan: CRM is kind of a broad term, right? What does it mean? If you asked five different hotel executives what CRM is, one might say "It's email marketing." One might say "It's guest engagement." Another might say "It's contact management."
None of them would be wrong, but each slice is missing the whole picture.
A lot of hotels have kind of cobbled together these point solutions to try to make it work. But they're creating data silos that don't really talk to each other and have manual processes, where if you can centralize that and bring it all in ...
From a reporting standpoint, we've heard horror stories. Here’s one:
We brought on a new client, a big hotel. He said that his data was in a black box. If he wanted to access it for, say, a geographic report, he had to make a request to IT. Two weeks later he got his report back and it was a list of guests by US state. That was as deep as it went. He needed something deeper, but it was too late to re-run the query by the time the data got back to him.
No revenue manager or general manager or marketing manager should have to make a request to the IT department. No exec in a hotel should need to know a query language like SQL. ...
For both marketing automation and data automation, when you set those business rules during the install, they just run. Nobody needs to upload a list to kick off a campaign....
The sales/marketing department, the operations department, whoever needs that data should be able to get it via any size device or screen.
We think there's a lot of opportunity, both organic and inorganic, for growth over the next few years. We see more consolidation in the industry, both on the supplier on the hotel side as well within the tech stack.
Tnooz: What’s an example of why hotel CRM matters?
Tnooz: When you, as a guest, walk up to the hotel and step up to that desk, that's the first interaction. It's a chance for the hotel to continue the relationship or to reset it to zero.
Say the desk clerk blindly, automatically asks, ”Have you stayed with us before?"
If I have high status or I've been at the brand for years, in that moment, you just took my relationship with you back to zero. We're starting completely from scratch. That’s a disheartening way come into the experience.
Hotel CRM can empower the front-line staff to personalize the experience, which encourages engagement.
Across the entire enterprise, pushing the right data at the right time to the right person; then from a marketing standpoint, pushing the right message to the right guest via the right channel. That’s our goal.
Tnooz: Who is driving the demand for CRM?
Sullivan: We're seeing owners and investors in hotel groups now being very engaged at a more granular level because they see the revenue that can be generated on the other side of the digital channel.
We think the digital channel is one of the most efficient channels for filling occupancy and upselling.
By centralizing the data, you can think about all of the KPIs that are meaningful to you. I think that's the most frustrating thing for owners or executives, to only have a piece of the picture. You're making decisions based on a limited view of the world, so some of it's gut-level rather than data-backed.
Having a more comprehensive view or seeing how everything is interacting together has definitely been a trending request.
During the quarterly or monthly meeting, the conversation can become more meaningful if the data is there to prove how, if we spend money in X place, Y is going to be the result.
Tnooz: In light of the recent investment, what can customers expect next from Cendyn?
Sullivan: They can expect big things….
Five years ago, the first meeting with a client was very educational. What is CRM? What does it mean for a hotel? How do we work with the data?
Now, hotels get it right away. They have realized that in a very crowded, competitive hotel market, service is one of the differentiators. Guest service requires data.
We can can connect to any hotel system, any third-party system, bring that data together, merge it, de-dupe it, certify it, and provide it in a very secure, PCI-compliant environment.
Then once you have that data, you have a single version of truth about your guests.
We look at that through two lenses; we call it "communication automation." Let's take every bit of that data that we now have in the profile -- that's either stay history, satisfaction, status, intent, or behavior. All of that data now becomes actionable.
You can do marketing automation: setting up business rules to trigger an automated, very relevant message just based on guests falling into those different audience segmentation buckets.
Also data automation; this is the other exciting part of it. Taking that same data and pushing it to the front lines of business so folks in the hotel, standing face-to-face with the guests, have that same adaptive information that could give you a more meaningful interaction.
Tnooz: Hotels have a conflicted attitude toward bookings from online travel agencies. How can CRM help them?
Sullivan: Through the use of business rules. I'll give you an example.
Oftentimes, a hotel may be getting dozens or hundreds, depending on their size, of reservations from channels, from OTAs. Typically, an OTA will send the reservation information with almost no information about the guest. Emails are often masked as
"email@example.com." Maybe some contact information.
There's not a lot you can do with that to engage with the guest coming via an OTA.
But we can take that collection of reservations and, through our matching via connections with other systems, but also by bringing in third-party data to supplement that. We build a bigger picture. We can often add a valid email address, we can tie in social media profiles, we can pull in interests and lifestyle data, demographic data.
Now all of a sudden you have this enhanced view of the guest that you can use to engage them when they walk in and say "Welcome back!"
You might see that they fall into a foodie segmentation variable - "Our chef is running a special tonight that we thought you might be interested in." "I see you stayed in a suite on a higher floor away from the elevator. I have one of those available, would you like me to upgrade you?"
There are all these different points and they can be structured. Whether it's a select service property, whether they're looking more for a structured, scripted type to drive that brand consistency, or a high-touch, five-star, luxury property where they're delivering more on that experience and they have the operational capability to do that.
We have some clients who have 70 variables they capture: room temperature, pillow type, whatever it may be to really go deep with understanding the guest.
We have others capture only three. Those are important and they can deliver on them.
Having that data available... That's the heavy lifting: bringing all that data together and cleaning it.... Pushing those few recommendations seems simple, but it can really impact the whole stay.
It's not just the front desk; the same data is available to the concierge, to operations, sales and marketing, we have some integrations with call centers so the profiles are coming up. Pulling a phone number and looking for a match and then pulling up that detailed information. That's the goal.
Tnooz: Can you tell me where the hotelier's mind's at when you talk to clients about updating their technology?
Sullivan: The folks we are talking to are getting more and more sophisticated versus, say, 8 years ago. There was a lot of legacy technology back then; to change out a system was a very heavy lift. There were 3- and 5-year cycles for on-premise, enterprise plays.
SaaS software has really changed the landscape. We talk to people now who get it, who are very sophisticated in their view of using data both for guest engagement and data-driven digital marketing.
Tnooz: But what are hoteliers thinking now?
Sullivan: The hotel folk I meet and that my team meets say, "I'm overwhelmed; there's so much. A lot of it seems kind of similar and I'm not sure what direction to go."
When we work with our clients, we always say "This can be a phased approach. You may have a database right now with millions of guests and you're just sending a monthly newsletter to all of them hoping some of them will respond. Let's start with that. Let's see what that's delivering.
Now let's take that and break those guests into audiences, create some very targeted interest-based campaigns for them with dynamic content so you have some variable rate imagery and messaging. Let's see what that delivers."
You make a comparison on performance. That's a start.
Tnooz: There are several startups offering hotel CRM and related analytics and say they’re on the cutting-edge, compared with Cendyn, a 20-year-old company.
Sullivan: The challenge is, I believe, for hoteliers, to "get the foundation right."
That's what we always say. Walk before you run. You may get pitched on a very cool application built by very smart, very nice people, but it's another little piece, right?
If it’s not driving your KPIs, if you're not driving revenue and revPAR and occupancy with the basics already through a data management strategy, through a solid email communication plan and a digital marketing plan that's integrated, then to add something on top of that kind of misses the point.
Tnooz: There are CRM systems that work across ecommerce verticals and that are offered to hotels. Companies like Salesforce and Adobe have the appeal of being from companies focused on CRM and that are diversified so will likely be around for a while. Why shouldn’t hotels opt for those instead?
Sullivan: Our platform has been designed specifically for hospitality.
If you think about working with a horizontal software play that's built a general tool and the software company doesn’t have deep hospitality experience, it’s not going to understand your workflow. The hotel industry is unique. It has its own nomenclature, like every industry does, and that language and that rhythm of working is baked in to our tool.
Not only are you customizing the solution to meet your business processes, but you also get a partner on the other side of the table that you're educating about your business. RevPAR, occupancy, PACE reports, STAR reports. Because we've been doing this for 20 years, that's baked into the solutions.
From install, for example, on our BI and reporting system, they have a reporting center with over a hundred pre-built reports arranged by job function and role. Anybody within a hotel has that at their fingertips right now.
That's why we're able to deliver a return on investment in a much shorter time frame - because we've done it before, and we've seen every type of scenario. We can make recommendations and best practices that are based solely on hospitality-use cases.
Tnooz: If I were a hotelier, reputation management would be a more emotional issue for me than CRM. Is there anything Cendyn can do to help my TripAdvisor rating, to put it bluntly?
Sullivan: Absolutely. We're providing this data. We have a survey - a guest satisfaction survey, product, but we've also done integrations with most of the main providers out there.
Part of that profile is pulling in the satisfaction score from their stay and that score can be automated as well, so that's another actual piece of data. This guest, if their net promoter score for your hotel dropped or if it's 6 or below, you can trigger all of this communication both to the guest with a message to tell them you're going to correct it or get them to come back, but also to the GM, to guest services.
There's this constant feedback loop of "Oh, that was a VIP. We kind of dropped the ball there. Let's see how we can fix it."
As far as TripAdvisor, we work with some partners on the online reputation management side. That's not currently software that we've developed, but that data is very interesting.
We want to pull in as much data as possible, centralize that data so we always have more data than any single system. It's this aggregate view that goes very deep. We can impact operations in that way as well.
Tnooz: How does your eConcierge product relate to this?
Sullivan: That started as a pre-stay planning trip that's used by Hyatt. We've been doing that for about a decade. Our latest iteration takes the pre-stay fully into the trip. It's fully responsive, mobile-enabled. Hotels can do an app if they want.
But the difference there is it's connected to CRM. If you're using both, you have that same global profile. If you're asking for preference detail within that, then that goes back into the profile as well, so there's a two-way connection there where we're capturing intelligence about preference based on their behavior actually during their stay.
The back-end of that is this recovery application the staff uses within the ticketing system and escalation processes there. That gets at the operations too, making sure that both the requests coming in, but if there are issues or complaints during the stay, they can be addressed.
Tnooz: Given how fractured the market is, what makes your solution stand out?
Sullivan: We have one of the most complete solutions. We give hotels the flexibility to add applications as different needs come up.
Our customers now who have an application in the cloud have a single sign-on. They're exposed to these other applications and the data is integrated between the two. That brings simplicity to hoteliers who have too many systems to check.
Somebody might start with just the CRM product, which is fantastic, but then over time, if they added eConcierge, which we talked about, they're still logging into one place, the same interface. If they add our upgrade tool, same thing.
You're not learning a new interface, you're not creating a different data silo, as you try to expand your business.
Tnooz: What improves when hotel customers choose your solution?
Sullivan: What we often see is that they start sending less marketing email and start driving higher revenue.
We’ll say: Now let's add some additional channels to that.
Once we have all the data in and it's clean, now let's take those same guests and start reaching them ... Now let's surround them with display ads on mobile, on social, with video, and then your ROI goes up further.
There's a progression there, and hotels see year-over-year, significant improvement in measurable results, when hotels follow that path.
Previously on Tnooz: May 2016: Accel-KKR invests in Cendyn