"Who is the ideal commercial leader today, and what is the most desirable career path an aspiring leader can take to get there?" asked Scott Dahl, program director, master’s degree in hospitality strategy and digital transformation, Les Roches Global Hospitality as part of the HospitalityNet World Panel series.
In my view - neither! Let me explain. Quite often, at both the corporate and property level, sales, marketing and revenue management (RM) specialists and teams operate in isolation from one another, without close coordination.
In many cases, they are even in competition with one another to sell the same rooms. In other words, the left hand - one team - does not know what the right hand - the rest of the teams - is doing, to the detriment of distribution channel imbalances, marketing efficiency and price integrity, and ultimately overall revenue generation, profit and owners' ROI.
Traditionally, sales, marketing and RM operate as separate teams with their own goals, technology tools, databases, vendors and more. But what is most important, neither of them are being incentivized to increase direct bookings or increase percent of repeat business.
This is one of the main reasons for the troubling trend of missed revenue opportunities, over dependency on the OTAs, alienated loyalty members and worsened profitability that started even in the pre-pandemic era.
So what is the solution?
In my view the ONLY solution is the creation of an integrated revenue generation commercial team. This single-minded team should exist at both the corporate and property levels and should consist of sales, marketing and RM, as well as CRM specialists and technologists. This team should be tasked with working together to acquire, engage and retain guests; optimize profitability and performance; balance the property's channel strategy, and increase revenue, especially direct bookings.
Who will lead this new integrated revenue generation team? A new role is needed at the property or hotel management company: revenue generation manager or officer, a cross-functional leader, versed in all five disciplines: sales, marketing, RM, CRM and technology.
Here is why CRM and technology should be integral part of integrated revenue generation team:
One glaring example of the current highly fragmented approach is keeping past guest engagement efforts (CRM) in a silo from new customer acquisition and marketing efforts. For example, looking at independent hotels, less than 10% to 15% of hotel guests on any given night are repeat guests, while 85% to 90% are first-time guests. Acquiring of past guests is 10 to 15 times cheaper than acquiring new guests.
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You cannot have a meaningful repeat business without CRM technology and program in place. Only a meaningful CRM technology application - as part of your hotel tech stack - can ensure deep engagement with your past and future guests. CRM tech not only provides automated pre-, during and post-stay communications, guest satisfaction surveys, guest retention marketing automation and drip marketing campaigns, but it also takes it a step further via guest recognition program management and loyalty marketing.
All of these fully automated CRM initiatives keep “the conversation going” with your upcoming and past guests, keeps them engaged and steers them in the right direction: to book your hotel when it's time for them to visit your destination again.
In addition, you can use your CRM first-party data about your best guests to launch similar audience marketing on Google, Facebook, Instagram, etc., to target potential customers with similar characteristics as your best guests.
The pandemic accelerated digital transformation by 10 years (McKinsey & Company) and today's travel consumers have become more digitally and tech-savvy than ever. Many of today's travelers' service expectations are around self-service, around do-it-yourself, from online planning and booking, to preferences for contactless check-in, mobile keys, voice assistants and communication with hotel staff via messaging. Serious technology implementations are needed to "appease" these exceedingly tech-savvy guests and their exceedingly high technology expectations.
This new tech-savvy customer plus the acute labor shortages and unattainable labor costs are the reasons why technology is making its way into every aspect of the industry: hotel operations, guest services and communications, revenue management, distribution, CRM and marketing. This necessitates the emergence of a new type of digital transformation leaders and managers - technologists - who understand the business applications of technology, the latest technology innovations, trends and best practices in hospitality technology, experts on how to understand, evaluate, choose, implement and manage technology applications in hospitality.
There is no doubt that today's complex travel customer journey requires an integrated strategy to engage, acquire, service and retain travel consumers across multiple digital touch points and across all digital channels and devices.
Only a single-minded team at the property - the revenue generation team, consisting of the sales, marketing, RM, CRM and technology specialists - can optimize guest engagement, acquisition, retention and satisfaction and boost revenues and profitability.
About the author...
is a hospitality and online travel tech consultant and strategist.