David Oliver is head of CRM - hotels & restaurants for UK leisure and hospitality business Whitbread, a job he’s held for almost a year. He spoke recently at IQPC’s Customer Insight & Analytics Exchange event in the UK, and afterwards I spoke to him about Whitbread’s use of analytics for hotel customer insight.
DO: Whitbread’s adventures started properly two years ago, with a strategic decision to invest in data, CRM and analytics, through commissioning what was thought would be a data warehouse but is, technically, a data mart; an outsourced copy of the transactional data. The vision was for it to become a central database to give us that proverbial single customer view. Two years in we have a lot of data, which we apply in a very business-performance-oriented way. We’re driving a lot of communications to customers, we’re running programmes to engage and enrol customers, but it was a little bit of an experiment. It’s not at all technology-proofed; it doesn’t service some of the emerging technologies, like smartphones, so we’re about to take stock and revisit the blueprint.
CMO.com: Where does analytics sit within the company structure?
DO: It’s within Whitbread’s marketing and commercial directorate, alongside brand marketing; network, which is about where we build new hotels, how we distribute effectively; and revenue management.
CMO.com: What challenges did you face in getting the business to accept what analytics can do?
DO: Data and analytics can be quite dry and inaccessible; people outside CRM can feel a little intimidated. It comes down to how we communicate about data. At first we weren’t telling our story very well, and we didn’t have a fundamental strategy for what we were doing. So data wasn’t getting traction within the business. People tended to glaze over.
We had to start by setting a very clear strategy and we concluded that it should be around engaging with customers. When customers are engaged, they spend more, stay more often, they’re better for the business. In all of our discussions, in all of our planning and thinking, everything became about engagement and it became part of how people thought about CRM and analytics. We also worked really hard on how we communicated to get to the heart of what we were trying to convey.
For example, all hotel businesses deal with businesses stayers who tend to stay mid-week, and leisure stayers, mainly at weekends. There are massive differences between the needs and the behaviours of those two. By getting under the skin of that it meant that we could talk in that language and explain some of the differences relating to value. Broadly speaking, business customers are more valuable, they stay more often, but there are more leisure customers.
Our strategy meant we could describe the needs of the business stayer in contrast to the leisure stayer. This brought CRM and analytics to life because we could tell stories about customers. They’re much more real and in much more everyday language, so people at senior level can wrap their head around them with much less effort. And at the very most junior operational level they get it as well.
CMO.com: Analytics is very unusual in having to talk to the CEO and the frontline staff and to engage with both.
DO: Before we made the changes we overcomplicated things. Even the term data puts people off. As a department, we were called CRM, but we’ve renamed ourselves Customer Marketing. It’s a small change, but it signals that we are about the business.
CMO.com: Was all the cultural change on your side or has the business come towards you as well?
DO: They’ve come towards us. If you can demonstrate the return that you’re bringing to the business, then it gives you better credentials. We were too busy dealing with the data to tell people what we were actually returning for the business. So we’ve put a lot of effort and thought into our reporting.
The most tangible element of what Customer Marketing returns for Premier Inn is in the communication programmes we’re operating, through which we generate customer demand. We promote to customers every week, primarily through email. And we’re putting offers to customers who we know are more likely to respond to them. We’ve quadrupled the scale of those programmes in the last two years. This has got us the credentials that previously we were missing.
CMO.com: One of the important things seems to be executive-level buy-in. It sounds like you had an executive decision to start the thing up, but you still had to earn that credibility.
DO: There was a significant investment to build and operate the data mart, so it’s quite right to ask what we’re getting for this. You’ve got to know your numbers and be able to wash your face when it comes to cost and return. We’re about to freshen up the vision and that will require further investment. We’ve the money to show for it already, so it will make that process much smoother.
CMO.com: How do you work with the rest of your group in terms of delivering insight to them?
DO: In terms of the analytics, there are three categories. The first is we have regular cycles of reporting: revenue, comparison with prior year revenue, in-period performance numbers.
The second part is much more ad hoc; a specific question for which analytics can help us find an answer. Examples might be the difference that applying a new format of restaurant applies to revenues or the return from a new location.
The third is in segmentation, which has helped us to understand the differences between groups of customers. Not just the straight business/leisure split, but also within each of those.
CMO.com: How do you see things developing in the future?
DO: At the moment the segmentation work is done as if it were a piece of analysis. We’re likely to systematically structure that into how we operate more. An obvious example is our very high-value customers. We’re likely to track and report them separately. It’s very likely we’ll build specific treatments for very valuable customers.
CMO.com: I was reading something the other day that asked whether you would treat a customer who has ten Twitter followers the same as one who has 1,000. Do you envisage being able to do that kind of segmentation?
DO: I expect that we’ll connect those kinds of things together through user reviews. If somebody has influence in social media, it’s going to be a good thing if we can have them present a more positive review of our product.
CMO.com: How do you capture that sort of information? What’s going on in social media seems to be qualitatively different from traditional structured transactional data. How do you make those two things play together?
DO: It’s data, just not in the conventional sense. We will inevitably leverage and encourage social media much more in the future than we do today.
CMO.com: Do you see that as being part of your Customer Marketing function?
DO: We talk about big data; big data would embrace those categories of data as well. So it may not be here and now, but I would imagine that it will be within our scope to join these things up within three years.
CMO.com: I’m interested that you see it as being part of insight and analytics, rather than customer service or PR.
DO: There are a lot of fuzzy edges here. We’re lucky; a lot of our social media mentions tend to be positive. So a business like ours should definitely be thinking of the scope of what customer marketing is, what data is, and rethinking it just to keep up.