WEB WATCH: Social networking as a CRM tactic

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by Andreas Roell

January 1, 2009

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Online effort can pay off in player/guest retention

Advertising in the midst of an economic downturn always reminds me of the following marketing truism: keeping a customer is far more cost effective than acquiring a new one. This adage seems to become more applicable when budgets tighten, and return on investment is regarded as the ultimate success metric. In these times, resourceful marketers tend to emphasize their customer relationship management (CRM) programs to make sure that loyal consumers stay so and work to simultaneously increase brand affinity within their existing consumer base.

The backbone of any effective CRM program is to maintain communication with consumers. This is usually done by offering brand-relevant benefits to consumers most often in the form of discounts. While being careful not to inundate consumers with frivolous information, marketers can use CRM tactics to stay top of mind against a competitive landscape. Providing a benefit to consumers is crucial to a customer retention plan because there needs to be an incentive for consumers to opt-in to a CRM program no matter if it is a newsletter or a mobile service. To encourage sign ups, advertisers should base their outreach around a value proposition. In other words, give guests something they will pay attention to and use. Whether it is travel or gambling tips, guest testimonials or special promotions, advertisers need to fulfill a consumer need.

In most cases, this is easier said than done, but the travel and hospitality sector is in a better position than most to make an impact. One reason is that their guests and visitors are already accustomed to discussing their experiences (both good and bad) with their peers online. Hotel and casinos can capitalize on community forums and e-mail programs by engaging with consumers using the very channels they already visit online. By doing so, there is a good chance that they will be able to reach their ideal user base. Another advantage inherent to the hotel and casino sector is that consumers tend to do a great deal of online research prior to making a purchase, so if advertisers can communicate with these users during this phase, they are in a position to impact purchase decisions—this is especially possible with guests who are already familiar with an establishment.

CRM tactics

E-mail is the most common tactic used to manage relationships with consumers. Whether touting promotions, announcing a lower rate or simply dispersing information, e-mails provide marketers the ability to create a strategic and timely message that can be disseminated to large groups of customers at once; however, relying too heavily on e-mail for managing customer relations can be a detriment to a marketing program because it is a one-sided communication model. Nowadays, consumers are used to personalized online interactions, so I think it is time for marketing teams to elevate their CRM plans.

With the rise of social networks and online communities, I think marketers are now in a place where they can enhance their CRM programs to relate to their consumers on a more personal level. Using forums such as Facebook and MySpace, marketers in the hotel and casino industry can reach previous guests and visitors and engage with them in a more meaningful way. One way for advertisers to do this is to use profile tags as a way to identify past guests. For example, if a Facebook user notes “going to Vegas” as one of their hobbies or tags a particular hotel in their latest photo album, marketers can serve them a targeted, relevant advertisement right on their profile page.

Audience segmentation

Making impressions on younger consumer segments can sometimes prove challenging for traditional brick and mortar businesses such as hotel and casinos. One benefit with targeting this group is that members are likely to have multiple online profiles on social networking sites and routinely check their email accounts, so if marketers can reach them in online communities as well as their email inbox, I think there is a significant chance of making a real impact with these hard-to-impress users. To reach the more professional crowd, LinkedIn could serve as a viable CRM channel. As of right now, LinkedIn does not support advertisements, but hotel and casino properties can create a custom page and forge connections with their business guests this way. To reach a broader group of users, marketers can tap into social applications that provide a forum for users to upload their travel itineraries and future trips. Using this information, marketers could target users as they are planning their trip and serve corresponding messages that are relevant and timely.

Microblogs

The development of microblogs also presents another opportunity for hotel and casino marketers to cultivate relationships with their consumers online. Encouraging users to follow a corporate persona via Twitter is not easy, but if accomplished, brands can push out content to followers and establish a real-time conversation with their future, potential and past guests. Several brands are doing an excellent job of communicating with brand fans using this channel; some provide information, others push out promotional content and others just talk. The common thread between effective examples is that they open lines of communication and enable a two-way conversation with consumers.

Hesitation is normal

When presenting these social media options to clients, hesitation is a common response. The unfiltered nature of these forums makes clients a bit nervous because brands could potentially open themselves up to criticism. My usual response is that these conversations are occurring regardless of clients’ participation, so it is better to at least be involved in it. By being a part of the conversation, organizations are able to confront any negative sentiments—all the while showing consumers that their opinions matter. Especially from a customer retention perspective, social media provides an opportunity for companies to amend and address any missteps and create long-lasting brand relationships.

Wrapping up

All companies—the hotel and casino industry notwithstanding—need to take steps to create a balanced marketing program that incorporates both CRM and customer acquisition marketing. Both are equally important and keep guests and visitors interested in any brand or property. By no means do I want to advocate that marketers pause their acquisition marketing to focus all efforts on CRM.

Economies always rebound so missing out on branding opportunities and communication efforts with future consumers will not be advantageous in the long term. In these tight economic times, marketers need to exercise their creativity and be accountable with their budgets to make certain that every dollar going out the door will contribute to a property’s bottom line. To do so, marketers need to work to make lasting impressions with their branding efforts especially since fewer people are traveling and spending their expendable income. I find that a well-executed and integrated marketing campaign is the best plan of attack in any economic climate. A holistic approach—of which CRM and social media will each be one component—is the most effective way for companies to reach their consumers across numerous touch points and engage in a dialogue with their consumers.

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