Customer-centric marketing: The key challenges in the Hospitality sector
Adopting a customer-centric marketing approach is not an easy task, especially for companies who have already established their own type of marketing culture.
Until now, most of the business entities from various industries were using product-centric marketing strategy, in order to set their focus on increasing sales and revenues. But if we think about it, the hospitality industry has always been more people-centered than any other business sector.
And with the arrival of customer-centric marketing, this particular industry has no other choice but to adopt this new trend immediately. This is key for each separate business entity in the sector, in order for them to maintain their competitive advantage and continue their steady development.
According to a very recent study of Econsultancy, 58% of business experts who participated believe that customer-centric marketing is the most important characteristic in establishing a truly "digital-native" culture. And yet, a very small number of hotels have managed to effectively change their marketing approach to serve the clients' needs, desires, interests, and expectations.
So if a lot of people find it important, but in reality very few efficiently adopt it, we can assume that there are some serious trammels on the way to the complete adoption of strong people-centered marketing strategy. And it turns out that those trammels are mainly related to data and technology. Let's see what they are:
1. Data silos
The creation of data silos is the primary reason for the inability of the hospitality companies to share customer data between the different organizational levels. And as a consequence, the silos are the main prerequisite for a lack of full understanding of consumer's behavior, interests, desires, needs, and expectations.
Keeping in mind that knowing and understanding the clients is the key to adopting an effective and people-oriented strategy, as the data is isolated, siloed, and partially available, they become useless and lack the full potential to give valuable insights to the business entity. Therefore, it becomes impossible for marketers to build a 360-degree customer view and use the knowledge for the implementation of a customer-centric marketing approach.
Another risk that the presence of data silos imposes is that they can provide wrongful data, which can be deceiving and misleading. When the data sets are isolated, they are in different formats, systems, and databases, which is a prerequisite for outliers, errors, inconsistencies, and mistakes.
Those significantly increase the risk of conducting faulty customer profiling process, which often leads to sending irrelevant promotional content, offers and prices, using inappropriate communication channels and even make mistakes in the personalization tactic. Of course, this causes low-quality marketing-related CX, decreased satisfaction (even before becoming a guest of the hotel), and potential consideration of the marketing efforts as irrelevant or spam.
2. Culture is not aligned with customer needs.
For many hospitality companies, adopting digital culture means that they automatically become customer-centric organizations. Nonetheless, that is not true. Data culture helps us to take advantage of all the data we have available in the company, but if we will focus on customer data: it is entirely up to us.
The customer-centric marketing strategy requires a common definition of guest-centered culture across all organizational levels. It is also important to put a strong emphasis on this common culture in order to prioritize the interests, needs, expectations and wants of the guests.
So that when we target them to build relationship or engagement, we are consistent in our approach throughout the full marketing process, as well as afterward: when they arrive at our hotel and when they repeat their booking.
3. Missing technologies to manage data
The lack of adequate technologies to manage data is a great problem for hospitality companies because the customer-centric marketing approach is all about understanding and making use of client data.
And without the necessary technologies, we cannot take full advantage of the data resources we have, thus we disabled to gain knowledge about the potential guests, nor achieve customization of our marketing incentives.
What is more, the challenge of "the missing technologies" is closely related to lack of ability to properly integrate data, and thus, is associated with the first challenge mentioned in this article: the formation of data silos.
On the other hand, when we have excellent data integration software on hand, we can use our data sets to effectively get to know our clients through data sharing, behavior, following up customer experience and feedback, and use this knowledge for targeted marketing campaigns.
4. Insufficient expertise in data analytics
Even if we have great technology, data integration by itself is only a prerequisite for excellent marketing insights. What is crucial to have on hand are data experts who can transform customer data into information, which to be utilized for people-centric incentives. So pairing technologies with human competence is the key to a successful outcome.
When people don't know how to deal with the available data, it is impossible to take full advantage of it and make the most out of the personalized and targeted marketing campaigns. And even though employing specialists seems easy, a study conducted by MarketingProfs shows that 28% of companies face difficulty in implementing a client-centric marketing approach, due to insufficient data analytics expertise.
Achieving customer focus is a winning ticket for every hospitality business entity. And even though many challenges are limiting the implementation of client-centric marketing, with the proper mindset, motivation, and effort, it is possible to take its full benefits and gain a competitive advantage to drive leads, build relationships and satisfy clients' needs.