Guest Post: Profit from the right relationship with your customers

By Travolution
By Travolution
February 4, 2014 09:35 AM GMT

Image via Shutterstock

CRM must be recognised as a business strategy, rather than simply a product to help manage customer interaction, says Michael Collins of Travelosophy and Robert Da Re of Dolphin Dynamics

CRM is a concept that relies on a culture that puts your customer (and for customer include prospect or lead) at the heart of all processes, communications and policies.

It is therefore a strategy that has implications for, and can benefit, all areas of your company. Any touch point with customers – not just marketing campaigns – can be better executed from the position of greater knowledge. Marketers can maximise resource and opportunities, the finance department can track where budget is being spent and where it is effective and the chief executive can have a far clearer overall view of how the company is being run.

However, many travel businesses still consider Customer Relationship Management mainly from a technology standpoint without fully appreciating the opportunities it can deliver - or actually understanding the CRM approach and whether they are prepared for it.

The starting point is therefore not the implementation of technology. Many CRM projects have not met expectations when they have focused on the technology aspects instead of the data, commercial and cultural aspects of CRM. To avoid this common pitfall, a properly constructed strategy is required that brings data together into one place and is based on a solid, defined business requirement, that has been bought into by all stakeholders across your business.

Many companies will already have systems holding all their booking-related data, but other relevant data is also likely to be held in additional departmental data repositories or as spreadsheets. The CRM objective is to turn that data into information, bringing together everything you know, or could know, about customers and prospects including their activities, actions, purchases and behaviour - and then turn that information into knowledge or insight.

Those travel businesses that hold data on their customers, enquiries and purchases can derive tremendous benefits from analysing this data, uncovering hidden nuggets of opportunity which leverage a direct effect on business profitability.

For example, a basic score for each customer based on Recency (of last booking), Frequency (regularity of bookings) and Value (expenditure) becomes a comparator – that is, a selection criterion for campaigns or propositions, as well as a valid measure of success of a customer relationship by monitoring the changes in individuals’ scores over time.

Applying demographic, lifestyle and psychographic profiling then provides more granular segmentation and, applying the concept to prospects, more effective conversion of new customers.

If the specific products purchased can be captured, then market basket analysis can be carried-out which identifies, for example, types and class of travel and preferences for destinations, seasonality and duration . This insight can deliver cross-sale opportunities through making the right proposition in communications and by positioning complementary products together on the shop floor, on the website or brochure page - or driving a telephone advisor’s pitch.

How a customer prefers your relationship to be managed is also an important insight. There are customers who, unless they receive every offer, feel unloved whilst, at the other end of the spectrum, there are those who really want to be left to their own devices. Customers at either extreme however could be equally loyal - and that loyalty will be undermined if their preferences for content and channel of communication are flouted. If you don't have this kind of customer insight, how do you hope to manage your key relationships effectively?

Such models can be created without huge investment in analytical software, as long as data acquisition and management can be applied in rules-based workflows and processes using Customer Relationship Management (CRM) functionalities, with the data dynamics regularly reviewed.

The more advanced travel back-office systems actually provide effective tools to support the capturing of key customer data and executing CRM strategies. However, these often remain unrecognised and under-utilised by the business. For example, imagine the benefits to be derived from extracting customer interests from profiling modules, tracking campaign response through booking statistics and personalising customer communications (e.g. booking confirmations), all of which may be accessible from your current system.

If you have a clear strategy your existing back-office should therefore be one of the first places you start, before you even consider looking at dedicated CRM software - as many back-office systems offer functionality and access to data that can be effectively leveraged in order to create a consistent, single view of your customer.

Achieving this single view will drive a customer journey that delivers ROI; analysis will reveal who is active and who is dormant, who will only ever remain a budget traveller, who can be upsold to 4 or 5 star travel and who your next advocate may be.

All of this is possible by collecting and maintaining the right data about customers, engaging them in a relationship where they are influenced by relevant propositions and a CRM strategy that delivers real benefits.

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