August 11, 2017

Turning the 80/20 rule on its head in hotel CRM


The 80/20 rule often comes in handy for prioritising scarce resources. It’s the smart thing to do. Except when it’s not.

If your desire is to innovate. If you want to be a disruptive force in your industry. Try inverting the 80/20 rule by figuring out what to do with the 80% of your customers who account for only 20% of sales.

Here’s an example from the hotel industry. We delved into the CRM databases of multiple hotel brands to understand how many guests had booked only once in the past five years. In every case it was a big number. We looked deeper.

The average value of those stays was higher. They were more likely to have booked direct than through a third party. And they were less likely to have booked under a discounted corporate rate.

Many even enrolled in the loyalty program. They behaved like model customers. The only problem is they booked only once and never returned.

With these additional facts what strategy would you pursue?

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