By Cindy Estis Green
What do L.L. Bean, Harley-Davidson and AT&T all have in common? It is hard to imagine three more different kind of companies, but the one thing they are all doing is spending a lot of dollars communicating directly to their customers through database marketing.
Has database marketing come to the hospitality industry? You bet it has. Many hotel chains are teaming up with airline companies frequent flyer programs and building up their own internal frequent user lists as a basis for "relationship marketing."
The difficult part is to describe your current customers in meaningful ways. If you want to buy a mailing list, for example, of customers who are likely to purchase a week-end getaway package it will be very rare to go to your list broker and expect to get a list of weekend getaway buyers.
But if you know that your weekend package buyers are 35-45 years old, live in three main zip codes in your state, have no children living at home and have household incomes over $75,000 then you will have an easier time in acquiring the list you need.
The following case study will help to illustrate the art of database marketing:
A 300-room resort hotel with golf, tennis and horse back riding facilities is having poor results in mid-week business production. It has a strong group business campaign but has gaps in business volume that can only be filled with transient customers.
The resort has been advertised in the travel section of the newspaper of the largest producing feeder city. Management believes their market is rather upscale and some-what older so they buy mailing lists in zip codes of upper income areas with a largely gray-haired population.
While the efforts were logical, the property still experienced only mediocre results. So management decided to undertake a database marketing approach.
A portion of the marketing budget was allocated to build a database
of customers and to harness the database for rela-tionship building and
analysis. Then three goals were set for the program:
The hotel staff had the address list cleaned up by deleting incomplete
addresses and removing duplicate
entries. They sent the list out to have demographic information appended to in house records. Once the demographics were attached, the director of marketing had an analysis done of demographic profiles for each of its top packages sold and broke it out by week-end and weekday visits.
Finally, the director of marketing sorted each list of package purchasers by geography and researched lifestyle patterns for each of the top five zip codes.
Knowing that the director of marketing was looking to fill weekday business, his first focus was on past purchasers during this period. Those who purchased the top-selling golf package were older, as suspected. But the heavier golfers were still the weekend purchasers.
The mid-week guests were broken into two distinct groups: those who tended to travel with younger family members such as grandchildren and participate in a broader spectrum of activities; and those who were on socially oriented informal "golf clubs."
The director of marketing had been promoting a very general golf message to sur-rounding upscale zip codes with an older population. It became clear that two campaigns were in order: the first to "bring the grandchildren" and the second became a mini-group sales effort to identify informal golf clubs and provide some organizational help to those in the group charged with planning the visit.
The director of marketing decided to establish a grandparents club with special benefits to its members to create a strong relationship with this group to improve repeat business. He also decided to segment his mailing list for newsletters and other hotel offers so the informal golf club members, the younger market which came on week-ends and the grandparents did not all receive the same message.
The director of marketing then pulled the list of travel agents who repeatedly book the mid-week business and created a special incentive for them based on the volume of business they delivered. Even though the analysis was done in a relatively short time, the hotel spent almost a year developing and segmenting the guest and travel agency databases and then maintained it closely after it was in good condition.
It was a substantial effort and one which paid off. Within a year, business improved significantly for mid-week transient business and the hotel hopes to maintain this through a strong retention program.
For furthur information contact: