Every meet helps to explore some hidden facts and findings, it makes us to
think and get more creative and find on how certain things work. I always tell
my Students in class that the time when I started learning, I found so many
things to learn. You need not have to be in a class room to learn, in fact more
you meet people, more you learn. I feel, creative edge is with people who keep
their eyes, ears and mind open.
Let me share, last weekend I went for a meet to a South Bombay upscale
Hotel property, property which is older than me, so let me accept this, I might
be very naïve, talking about this property.
Mumbai has been springing up since last two decades and yes Mumbai is an
Island city which makes it to be complicated when it comes to growing. It
grows less in latitude and more in longitude.
Coming back to Springing up, South Bombay has been losing its sheen
gradually. Business has moved more towards suburban, big corporates at BKC,
bigger at Andheri and Kurla road, Software firms at central Mumbai suburban
place like Navi Mumbai and more manufacturing close to panvel, kalyan and
Pune. This gives major demographical and geographical change to Mumbai.
This gives major setback to SOBO (South Bombay) properties in Mumbai.
Luxuries franchises have started at suburban, with much better packaging,
quality and yes with its customer tank. If you notice, these franchises will never
part with their customer tank, cause that what makes them to win franchise
business concept.
It’s not just Mumbai, but this is same case with Bangalore, city more moving
towards Whitefield. Hyderabad, city moving towards Gachibowli and Hitec
city, Delhi losing to Gurgaon. Pune city moving towards Hinjewadi. Ahmedabad
moving more towards Gandhinagar.
List goes on and properties which had been set up in 70s and 80s are losing
their RevPAR.
Though, there are certain cases, where old city is still earning maximum
RevPAR, like Intercontinental Marine Drive in Mumbai. The Leela Palace in
Bangalore or Taj Mansingh at Delhi. But maximum properties are losing it.
What’s the way out, are we not creating ourselves to repackaging business or
will just give away to the growth at the other side of town.
Let’s turn this and here I have some steps, which may not be ground breaking
concepts, but genuine and workable.
It’s regretful that there are some properties that are still setting system and IT
to do transactions, come on, by now we should be in new age of systems.
- Master data management
- Transaction system
- Artificial intelligence
- BPM
- Workflow based
Are old enough concepts and lets bang on what we have DATA.
We know we are amidst data explosion; the data deluge is in fact a great
opportunity – if only we could unlock the potential and hidden value of data.
Given that much of data is driven by customers, businesses are positively
teeming with customer data available from an increasing number of sources. In
the ultra-competitive battle for customers, it's a race to capture as many data
and information about customers as possible.
Let’s even understand that Data is worthless without ability to translate the
data into actionable insights and intelligence.
Customer analytics?
By now we have gamut full of data, which even gives you edge on variety.
I
mean variety data headers, which were meaningless till now and comprised
of minute information without meaning. Understand this variety and see if we
get trend out of it. One variable, which actually leads to decision making by
customer, but should be less than 5 variables.
There would be a case that customer made choice of your property before as
his business was around your property, or probably was more concerned about
brand this time, or probably due to leisure and list can go on.
Now let’s tackle these reasons of choice, with right approach and packaging.
Property owners and managers need to understand and build Customer
centric analytics, which would lead to customer centric driving, managing and
optimizing key customer decisions, based on a systematic analysis of the data
available on customers and their behaviour – which can translate into veritable
goldmine for targeted marketing campaigns.
Predictive Analytics (PA)
I understand there would be many sceptic executives around saying what is
the point in predicting?
Trust me; it works to know the business opportunities and challenges.
Hospitality would always be customer focused and predictive analytics should
be primarily used to understand relationship between explanatory variables
and predicted variables from past occurrences and pattern in data. These data
sets are then used to predict future trends of customer behaviour, which is
reliable enough to shape decision making, forecast trends, and ultimately to
identify and reduce potential risks and improve performance.
Predictive analytics is about sifting through the noise and the patterns in
data, deriving actionable information and insights to enable and shape more
proactive decision making, and ultimately improve business performance; it
helps connect data to effective action. The crux is you need enough quality
data to accurately identify and extrapolate patterns and predict future
behaviours.
The more a business can predict the future, the better it can make intelligent
business decisions.
If you can predict short- and long-term behaviour, you can
affect short- and long-term behaviour as well.
Customer Metric
We need to change our perception; we need to treat customers as long-term
investment. Let’s call this as Customer Lifetime Value (CLV). CLV would be
simple unified measure of the value of a customer in each segment, which
would be focused on net revenue or profit from a given customer over their
entire lifetime engaging with the business, packages, product and more).
At micro level, CLV helps companies decide which tactics should be used for
which customer segment and at macro level, it is key ingredient in calculating
customer segment equity and lifetime value customer segment.
Marketing Mix Modelling
This is something, which I learnt in my MBA lectures and trust me, I never
understood anything of it. My learning is very active when it comes to self-
learning and in problem situation.
MMM can be advanced stats analysis technique and can drive different
KPIs, it can link to internal and external factors like, advertising, promotion,
pricing, sales activities and significant influencers like competition and market
conditions.
This would even explain how these contribute achievements –
revenue, customers, occupancies and more.
Build model to determine net effect on a property’s revenue by your MMM
initiative.
I understand it’s not easy as it seems and we need a turnaround strategy to
manage our data and IT setup. Let’s not step back, rather find achievable
milestone. We even need to understand that data will never be perfect or
complete. But reducing the gaps would ease and allow us to drive this analytics
in a better way.
Moreover, don’t think that prediction would be 100% accurate, its a mere
guideline to drive your optimization.
An integrated customer analytics and data-driven decision management
solution, performed in a structured and comprehensive analytics environment,
is the key to releasing the power and realizing the potential of data -- at every
point of the customer life cycle.
About The Author
Mahesh is the Managing Director of Compel Consultancy Pvt Ltd,
which specializes in software for hospitality vertical. He is also a
visiting faculty at Wellingkar’s College and ITM He can be contacted on
mahesh@compelconsultancy.com.