Millennium Hotels: why loyalty is all about feeling the love
Building loyalty is complicated and the industry is still not connecting the data dots. Pamela Whitby speaks to the CMO of Millennium Hotels to find out more
Nobody could have predicted the scale of the disruption wreaked on the travel industry by the online travel agents (OTAs), nor for that matter the phenomenal rise of Airbnb. And, nobody in the industry today wants to miss the next big innovation in travel, says Franck Kermarrec, the chief marketing officer of Millennium Hotels.
What is clear, however, is that innovation in marketing at the most basic level is still needed. “I completely agree with Rob that we are still not joining up the data dots between revenue management and marketing,” says Kermarrec, who joined a Day 1 panel with Rob Paterson, the CEO of Best Western Hotels & Resorts, at the Digital Strategy Summit last month.
Speaking to EyeforTravel in a post conference interview, Kermarrec outlined some of the steps that Millennium, a mid to upscale brand with 136 hotels worldwide, is taking to address this. For one, the firm has made a substantial investment in its CRM infrastructure. Like many hotel brands this was, until very recently, decentralised. “This meant we had no way of knowing a guest’s previous stay preferences at a global scale. We were pretty much treating them as a new guest on every visit,” he explains.
Millennium is working with Hong Kong-based Metasphere on its CRM redevelopment, and is already seeing positive results. Kermerrac explains: “We wanted something fully customised. We wanted a partner that could leverage our smaller scale into a hyper agile infrastructure to deliver the flexibility that we need.”
RM and marketing are still not working together as well as they should be
While this is progress, RM and marketing are still not working together as well as they should be. “Today, no system does this in an integrated way. The complexity stems from the number of different stakeholders in the ecosystem, as well as the massive range of consumer behaviours and purchase patterns,” explains Kermarrec.
Such lack of integration has been particularly challenging for the bigger legacy chains like IHG and Marriott, which have spent millions on improving their IT infrastructure. But even they are not there yet!
In some respects, this is where smaller and independent chains have an edge today. They are able to be more flexible and innovative, and to trial new technologies and ideas, a point made by Anthony Scotland, Director, Strategy and Special Projects at Hersha Hospitality Management (HHM) in an interview with EyeforTravel last week. There is further proof in this from brands like Yotel, which was founded in 2004 and Dutch brand CitizenM (2005), which have not been held back by legacy systems.
Another major challenge for brands today is driving loyalty. According to Kermarrec, true and genuine loyalty is complicated for a brand but also for consumers to believe in. So, although the group launched My Millennium earlier this year, he echoes a view expressed by Wyndham in a recent EyeforTravel white paper - that a loyalty programme alone is not enough. “Consumers are not going to be loyal to brands because of points or free drinks. That used to be okay in the 1980s but it’s not anymore. Customers are much smarter and they have much better knowledge of what is available on the market, so the outcome is that we need to reshape loyalty systems,” he says.
In fact, Kermarrec believes that loyalty is closely linked to love. “Customers are loyal, simply, because they love the brand: they love the consistency, they love that they are being recognised, they love the experience, and beyond everything else, they love the people.”
In order to achieve true loyalty it is clear, he says, that “we do need to connect the dots and I don’t think anybody is doing it full on right now. There is definitely room for improvement.”
At the most basic level, hotels need to get the basics right. The bed must be comfortable, the shower must work well, the room must be spotless, and so on. But if you really want to drive loyalty, you have to go above and beyond the ordinary – not for all, but certainly for cherished, select customers. Importantly, with the cost of new customer acquisition rising, Kermarrec argues that building loyalty with existing customers should be a priority because you already know them. "You have some data points, which should help you to deliver on guest preferences through unique experiences, and therefore create more love," he says.
At Millennium, partnerships that deliver experiences are key, and a major one has been what Kermarrec describes as the “perfect match” with Chelsea Football Club. Two of its brands, Hotel Millennium & Copthorne Hotels are actually situated at Stamford Bridge, the home of the Club.
If you really want to drive loyalty, you have to go above and beyond the ordinary
“It’s about giving customers access to something that is not available anywhere else. It is about making the relationship experiential rather than transactional,” he explains.
At a simpler level, the group is trying to consistently surprise and delight select, loyal customers. “If you can build a story about the guest - why they are coming, who they are coming with, if it’s a special occasion - then it is possible to treat them differently and in a unique way,” he says.
Direct is still best
While Google and the OTAs are “friends that are incredibly useful at delivering new customers, the Holy Grail remains direct channel growth”.
“They [OTAs] spend hundreds of millions in marketing for us to acquire new customers, and our job is to convert these customers into direct bookers. That should be the main focus for the marketing team in any hotel and it is where we are focusing all our efforts,” he adds.
From the GM to the front desk and housekeeping, everybody needs to be committed to converting OTA customers into direct loyal bookers. “I think we are getting there but it requires training and this is a very time-consuming part of the job,” Kermarrec concludes.
Franck Kermarrec, Chief Marketing Officer, Millennium Hotels, recently spoke at the EyeforTravel Digital Strategy Summit in London. If you missed that, why not join EyeforTravel for one of our second half events in Chicago (Oct 28-29) or Amsterdam (Nov 26-27)