Home The New Good, Bad and Ugly Customer: Has Social Media Changed the Conversation?

The New Good, Bad and Ugly Customer: Has Social Media Changed the Conversation?

In the past, a good customer was someone who didn’t bargain too much, was loyal (almost always) and spent constantly and consistently. They were predictable, reliable and fair.

However, with the rise of social media (and the new forms of accountability and reputation management that inevitably come with it), hoteliers are being forced to re-evaluate how they interact with their customers, while revenue managers are looking at ways to incorporate this into their revenue management strategies.

The question that many hoteliers are asking today is: How much is the rise of social media changing the conversation?

The uses for social media are varied for hoteliers. Typically it is used to develop communities of customers, collect feedback, and monitor the overall sentiment of the hotel; all of which are important. Ensuring that your customers feel like they have a special relationship with the hotel means that they will keep coming back; and social media allows hoteliers to not only engage with customers on a one-to-one basis, but also track behavior and loyalty to a greater extent than ever before.

In most cases, the core values of loyalty remain the same: hoteliers still need to identify their best customers, track their total/spend value and their interactions, provide special deals and special pricing as appropriate.

The advent of social media, however, means the industry has a new data source to identify the customers who are influencers. Identifying the influencers is not as simple as looking at a guest’s followers on Twitter, or friends on Facebook – those with lots of followers are not necessarily influential if they just create a lot of noise.

Social media analytics allow the industry to “quantify” the impact/value of a guest’s followers and be an additional point of reference to determine the overall total value of a guest to a hotel. If the expected value of a positive tweet is greater than the expected value of the ancillary spend to be absorbed, then the decision who to provide a room to in times of high demand is obvious in most cases.

It is important for hoteliers to see social media as a data source that can inform both tactical and strategic revenue management practices. Utilizing the information freely available online to identify market segments, tracking needs and preferences and determining buzz about pricing policies can essentially act as a “world-wide focus group” and help build loyalty and determine what the conversation between hotelier and guest should be about.

As an outlet for driving customer loyalty, hoteliers must, as they always have, deliver good, personal service. However, the industry now must turn to a new channel and capitalize on the opportunities that it can provide.

While the jury is still out in terms of deciding the value and size of impact of social media (it being such a fresh medium for information), hoteliers should embrace (and not panic about) being involved on a far more personal basis with their guests – not only on hotel-specific sites like TripAdvisor but also on instant forms of social media such as Facebook and Twitter.

To date, there has not yet been a lot of real investment in what it means to the industry; however, some hotels groups are far more advanced than others in managing and embracing social media. If this gap continues to widen, some hotel groups will be at a distinct disadvantage.

There are three main ways to evaluate social media and apply it to the revenue management strategy of a hotel. The first of which assesses the basic performance information by channel using descriptive statistics. These answer questions like “How many friends and followers do I have?” or “Which sites are most productive?” and are useful in the tactical, day-to-day management of social media programs.

In order to develop strategy, however, a deeper look is required and a social network analysis should be performed to identify influencers within your social networks. This should go beyond looking at who are the prolific writers or tweeters, or the ones with the most friends and followers, but focus on those who are listened to the most.This analysis of individuals’ influence in their respective communities should be complemented by a significant social media analysis, using text analytics to turn volumes of unstructured text data into meaningful, actionable insight. This text mining, like data mining, uncovers linked topics, and can provide insight into what is important to the customer base. Sentiment analysis uses natural language processing to understand how customers feel about your brand, your products and your services. Sentiment should be tracked over time, so you can identify trends, or analyze the effectiveness of a marketing effort.

It is becoming clear to hoteliers that social media could prove to be a seismic shift in customer relations and, as such, revenue management strategy; time will tell how large the shift really is.

However, hoteliers who ignore the rise of social media, passing it off as a “fad”, will face significant disadvantages down the track if social media continues to grow as exponentially as it has. By being proactive and building social media into customer retention and revenue management strategies, it is possible to ensure that key influential customers leave with a positive experience and hotels continue to meet the needs of key markets, which in turn drives up demand.

About IDeaS
Founded in 1989, IDeaS Revenue Solutions – a SAS Company, offers industry-leading pricing and revenue management Software, Services, and Consulting to the hospitality and travel industries.

While we’ve been serving the hospitality industry for over 20 years, we’ve also been called on by industries as far-ranging as parking, airlines, transportation and event ticketing.

IDeaS was acquired in 2008 by SAS, the leader in business analytics software and services, and the largest independent vendor in the business intelligence market.

Headquartered in Minneapolis, MN with our Global Technology center located in Pune, India, IDeaS maintains sales, support and distribution offices in North & South America, the United Kingdom, Europe, Middle East, Africa, Australia and Asia.

No matter what we’re working on, our goal is to make revenue management so user-friendly, insightful, and profitable that revenue management professionals wouldn’t think of going back to the old way of doing things. We look forward to talking with you and working to exceed all your expectations.

Leave a Comment