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Why you should consider a CDP in your 2024 hotel budget

Last Updated: September 4, 2023|Categories: Blog|Tags: |6.1 min read|

If you think you know your guests, think again.

Your guests might have come in the past for a romantic escape or for business. But now, they may be considering a family weekend vacation.

The family of two that just checked in? They may prefer a text messages for communication now, but in the future they may go for email because it can be less intrusive.

Are you keeping track of changes in guest preferences?.

Your business wouldn’t exist without your guests, so it’s essential to get to know them and their evolving needs. A Customer Data Platform (CDP) helps you do this at scale by synthesizing detailed customer profiles in one place. With this information at their fingertips, your reservation sales, marketing, and customer service teams can achieve ‌more effective communication and cooperation, leading to greater rewards.

As you are working through your budget for next year, a CDP should be at the top of your wish list. In this blog post, we will cover five reasons a CDP is a worthwhile investment for a successful 2024.

What you will see here:

Make your ad spend more efficient

In every marketer’s fantasy world, every person who views your ads would make a purchase.

But in reality, the average conversion rate for Google ads in the hospitality industry is 3.55%. Making sure you’re targeting the right people with the right message at the right time is key to make the most of your ad spend.

“Right” is doing a lot of work in that last sentence. Figuring out what “right” is requires complex data analysis — the kind you can’t do on your own.

A CDP will help you improve efficiency in making data-led strategies. With rich guest profiles, you will gain access to comprehensive customer information, enabling you to establish more precise customer segments for targeted advertising. The more specific these segments are, the more applicable the campaign will be for your customers. As a result, the chances of people responding to the campaign increase, ultimately leading to more profits through upsells and direct bookings.

Speed up your ability to make personalized marketing campaigns

How many promotional emails ‌do you receive everyday? Dozens? Hundreds? Maybe only two or three are highly relevant to you. If you’re lucky.

Guests want personalized communication. In fact, 91% of consumers are more inclined to shop with brands that recognize, remember, and provide relevant offers and recommendations.

The less personalized your communications are, the less chance of engagement you will receive from your guests. And that’s your time wasted. Hoteliers already have enough on their plates, so it’s crucial to speed up the process and automate tasks as much as possible.

A CDP can quickly bring to light important details contained in your customer information — such as their likes, dislikes, and spending patterns. This then opens the door for potential revenue through directed marketing efforts that are tailored to specific customer groups.

Take a page from Lub d’s playbook, a group of six properties across Asia. Their segmentation and personalization strategies generated a 100% increase in direct revenue YoY. Learn more about how unified guest data from Revinate helped Lub d transform its business here.

Eliminate data silos that hold you back

Is your front desk staff the only group with access to your PMS? Your PMS is filled with valuable guest data. Some of it moreso than others. But if that data is just sitting in your PMS, then it isn’t working for you. Disconnected data is leaving money on the table.

It’s true. Data silos are hindering growth within the hospitality industry. According to IDC Market Research, businesses lose up to 20% of revenue from not utilizing data to its full potential.

With a CDP, you can take all your data sources and create one source of truth to start activating your most valuable data. Data from your restaurant, spa, golf club, reservations systems, and more is unified, cleaned, merged, deduped, secured, and stored.

Ojai Valley Inn, an independent hotel based in the US, partnered with Revinate to remove data silos between their sales, marketing, and reservations teams. Today, all of the departments are in sync and they have the data to make proactive, informed decisions. And they saw a 23% increase in average stay value. Learn more about their success story here.

Increase brand loyalty

Loyalty points programs are one of the most implemented loyalty programs in the hospitality industry. But did you know that the traditional loyalty points program is 40 years old in 2023?

It’s time for a change.

The next generation of travelers doesn’t care about loyalty points. They want to embark on adventures that are culturally rich where they can connect with locals. In fact, 74% of travelers agree they care more about experiences than expenses. They want personalized experiences and 1:1 marketing, based on trust.

Right now, you probably have a hard time identifying who your repeat guests even are, because your CRM may have multiple profiles for the same person — especially if they booked with an OTA. Through identity resolution, CDPs give you the capability to pinpoint precisely who your most dedicated customers are, so you can entice them to book directly with you and strengthen your relationship with them.

Stay compliant with shifting privacy standards

Personalization is appreciated by 69% of customers as long as it is based on data they have explicitly shared with a business.

Your guests — and their governments — care about how sensitive and personal data is being collected and processed. 137 out of 194 countries have data privacy regulations in place, and privacy standards are only expected to increase. It’s important to manage data privacy and security concerns in compliance with industry regulations, such as GDPR and CCPA.

The thread of data breaches are something you also need to keep in mind. In 2023, the global average cost of a data breach has risen to a whopping $4.45 million — a 15% increase over the previous three years. This indicates that it is essential to ask your technology partners about their data processing and security protocols as part of your vetting and evaluation process.

With a CDP, security risks can be reduced as highly sensitive data can stay behind a wall.

The next evolution of your marketing automation

CDPs have seen an incredible surge in adoption in 2021, with the CDP industry generating an estimated $1.6 billion in revenue.

Marketers have started moving away from using data management platforms and opting for customer data platforms instead. While they both collect data, DMPs are generally focused on short-term insights. CDPs continually add to the relationship data collected among all data types to analyze and build a more robust picture of the customer.

We hope this blog is helpful for you to understand how a CDP can help you thrive in 2024. If you want to learn more about CDPs and how they can benefit you and your guests, read our blog, “A comprehensive guide to the customer data platform.”

If you have questions about how you can drive more revenue by activating your guest data more efficiently, book a meeting with our team.

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