Relevant market segments for your hotel are integral for optimal pricing strategies. But do traditional segmentation strategies support customers increasing demands for personalisation? And is the 'Segment of One', the Holy Grail of segmentation strategies? Neetu Mistry, Commercial Director of Cycas Hospitality, shares her thoughts in advance of February's 'Revenue Management and the Connected Customer' conference.
Neetu, how fit for purpose are existing segmentation strategies?
Currently, hotels use a wide range of segments to review and manage their business in the most fit for purpose way that they feel is the most beneficial for them. This process lacks consistency and synergy for the guests that have a different type of loyalty in today's market.
In addition to this, the changing dynamic of customer buying behaviours and the accessibility and homogeneity of accommodation options, has made it furthermore inconsistent to put customers into a fixed box or category. Therefore, do we have to question the validity of our existing segments and ask are these still fit for purpose? Do the segments we have in the business today still provide direction, give competitive edge, help us truly understand buying behaviours and allow us to drive targeted and profitable sales?
The ‘Segment of One’ has been called the ‘next generation of customer engagement’ and a requirement if businesses wish to engender loyalty with their customers. How close is the revenue management function today to achieving that?
The ‘Segment of One’ has been around for a long period of time and it has always supported the move away from mass audiences and marketing and moving towards identifying unique products and services linked to individuals buying behaviours. This previously led to the rise of customer loyalty programmes, which started to gather data to better understand the individuals and target them based on their historic behaviours. Today however, we are a lot more informed, both as customers and businesses with the rise of big data and sophisticated technology, despite this vast array of information, technology and learnings, are we able to intelligently apply this to our revenue management decision making process to yield the best revenues and ensure that we are capturing the right guest, for the right product at the right time, through the right channel?
What are the key changes that are required within the revenue management function if we are to achieve the ‘Segment of One’?
What are our barriers in revenue management to achieve the ‘Segment of One’ and drive unique experiences and yield the best opportunities for our businesses? Technology, talent and speed to market come to mind. Technology across industries in revenue management still varies vastly today, from the good old Excel spreadsheets to the advances of RMS tools and now the beginnings of incorporating AI into our processes. But how do we ensure that this doesn’t become the ball and chain slowing us down as the rest of the disciplines advance?
Talent also always comes up in discussion. Key topics such as 'what makes a good revenue manager?' and 'How do we cultivate the right talent?' continue to be hot topics in revenue management. However, we seem to keep recruiting for revenue managers based on the need that exists today and not what the future looks like. With the amalgamation of Sales and Marketing into Revenue Management and the requirement for these three disciplines to work together required the revenue manager of tomorrow to be more than just the inventory manager.
Finally, the speed in which we respond to changing trends, behaviours and data seems to be very slow paced. In today’s environment as we seem to catch up with one element of the changing world, then next one is already happening and we have missed it. How do we keep on track with this and ensure that we maintain competitive edge in satisfying the needs of the customer, but also delivering products and services that they don’t yet know they need or will have in the future?
Neetu will be asking these questions, and more ,to a panel of industry leaders at ‘Revenue Management and the Connected Customer'. Register now for this unmissable one-day revenue management conference on 12th February 2019. Hear the thoughts of those challenging and disrupting revenue management as we know it as they discuss what the 'connected customer’ means for revenue management. Listen, debate and network as we discuss how customer's increasing demands will shape your revenue agenda in 2019. Conference website here www.opportunity2019.co.uk