Coming from the world of high-tech innovation, Gary Thomson was no stranger to IT as a business enabler. But hospitality was a new world for him. It's not surprising that he'd embrace his new industry with the same innovation and vigor he'd practiced throughout his career. As a corporate officer and CIO for Choice Hotels International, Thomson was ready for the challenge. The real question: was the hospitality industry ready for him? Learn how Choice became the industry leader in real-time customer data integration-and, by extension, a leader in customer marketing.
When Gary Thomson joined Choice Hotels in 2001 he was already a high-tech pioneer. Thomson had spent 11 years at AT&T Bell Labs in the 1980s, delivering advanced solutions on behalf of what was arguably the technology luminary of the 20th century. With a career packed with innovation, Thomson - now Senior Vice President and Chief Information Officer - could never have guessed that he'd soon be breaking new ground in the hospitality industry.
With 30 million customers to serve in 44 countries across 10 brands - including Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Cambria Suites and Suburban Extended Stay - Choice was already an industry leader. It had a customer loyalty program, Choice Privileges, and real-time bookings and inventory management via the Internet. The hotel's property management system, which is synchronized in real-time with the company's central reservations system to track room inventory and collect guest information across 3,500 franchised properties, was one of the first of its kind.
Because of its franchise model, Choice serves two sets of customers. "We need to provide superior service to both our franchisees and our guests," Thomson explains. "We have to work closely with both of them and make sure we understand their evolving needs." As hotel guests enrolled in the rewards program, made their reservations on the Web, and responded to satisfaction surveys, activities across franchises and guests were increasing. And so was the company's data.
IT Lays the Foundation
Like most industries that were trying to get closer to their customers, Thomson and his team understood that the hospitality business was primed for innovation. "Our CEO was talking about inventory management and yield management, but there was a subtext," he says. "We all knew we needed to report on individual hotels and customers. And we wanted to do smarter marketing." Thomson's team began refining IT infrastructure, acquiring new tools and re-architecting systems, in order to provide a solid foundation for the coming wave of customer centricity.
Thomson's team began talking to CRM vendors, focusing on electronic CRM functionality in order to support targeted customer mailings. They quickly whittled a group of eight candidate vendors down to four. But with data coming from 15 million guests and thousands of properties, they knew that no matter which vendor they selected, there would be issues.
When the company added a new senior vice president of marketing, Wayne Wielgus, the vocabulary changed and the urgency increased. "Wayne really got it," says Thomson. Wielgus began discussing a vision of guest recognition, customer loyalty, and automated campaigns, upping the customer-focus ante and the company's CRM capabilities had a new level of urgency. But Thomson and his team were geared up. "We saw all this coming," Thomson says. "We'd built a solid foundation and we were ready to expand it."
The ability to recognize a customer at the time of interaction was paramount for Choice Hotels. Like many companies, Choice customers had variations and discrepancies in their names and addresses, used different identities for different types of travel, and stayed at different Choice hotel brands for different reasons. When they made reservations or checked in, their loyalty numbers weren't always handy. The company needed a way to identify its guests at any of its multiple service channels, from Internet reservations, to the front desk, to in-house services, to marketing mailings.
Thomson and his team did their research. "Once we'd nailed down our short list of CRM vendors, I asked each of them how they sorted through all the data to make sure there were no duplicates, and that our customer records would match. Every one of them told me that I'd have to send my data out to one of the third-party services. But we wanted to do real-time customer recognition so that we could interact with each customer in a relevant and meaningful way. If I have to ship my data someplace, I can't do anything in real time."
CDI Checks In
An ex-colleague of Thomson's worked at a company that specialized in matching patient records for health care providers. Over breakfast one day, Thomson explained his dilemma: data coming from different systems wasn't properly cleansed and merged to populate a new CRM system. This meant Choice's customer relationships were only as good as the data was accurate. How could he get his customer data reconciled and available in real-time?
The answer came with a product from Initiate Systems, a company specializing in matching patient data from disparate systems "on the fly," by way of a powerful, highly accurate, probabilistic algorithm for real-time identity matching. The solution, known as the Initiate Identity Hub, already served as a data clearinghouse for a wide array of systems across many health care networks.
Initiate is one of several providers in an emerging space known as customer data integration (CDI). As customer volumes escalate - through mergers and acquisitions, increasingly successful marketing, and the introduction of new systems and data sources - the ability to integrate and manage customer data to create a complete view of each customer is increasingly viewed by executives as a mandate. Separately, the rise of packaged applications and corporate data supply chains have begun to spin at a velocity that no one could have predicted. CDI aims to centralize the processing, standardization, matching, cleansing, and deployment of customer data, availing it to systems and users company-wide through a central point known as a hub.
"This was exactly the functionality we needed," says Thomson, "but we weren't in health care, so I asked them if they could apply their technology to our requirements. We had some heavy-duty technical discussions. It looked like it could work." Initiate now provides customer data integration and matching across industries.
Choice Hotels uses its Initiate hub to acquire and reconcile customer data from across its central reservations, frequency marketing, and property management systems. The hub matches customers based on their demographic and behavior information-eliminating the need for hard-coded loyalty numbers when the data is entered. If a customer match is not found, the hub creates and deploys a new customer record.
The data is then provided to the company's Informix data warehouse, which is accessed by a broad user community via a variety of tools. Chief among these is the company's Unica campaign management system, which acquires data from the warehouse to drive automated e-mail marketing. The combination of an intelligent hub to reconcile, match, and create clean customer data, a data warehouse platform to store historical customer details, and robust reporting and campaign capabilities gives the company a powerful competitive advantage.
"We now recognize our guests at any point," confirms Doug Miller, Director of Customer Information Systems for Choice Hotels. If someone books a room, we'll know who they are. We know them across our brands, properties, franchises, and stays." Choice can now even recognize a guest who may have forgotten her Choice Privileges number. "Even if you don't have your number, we can match you based on other details," Miller explains. For instance, a customer who provides her last name and home phone number at check-in will automatically be credited loyalty points for her stay.
Beyond CRM: Total Customer Choice
The fact that the CDI hub is the trusted customer system of record for Choice Hotels International isn't lost on either Gary Thomson or Doug Miller. Miller's team is busy integrating customer-based applications to drive efficiencies and further leverage the customer hub.
But the two executives emphasize the business capabilities that are now possible because of CDI, for instance, the uplift in the number of hotel stays among frequent guests due to successful cross-selling campaigns. The company has also seen an overall increase in the number of Choice Privileges members.
Neither Choice nor Thomson has any intention of calling it a day. The company recently launched a Customer Care program that will increase the variety and use of its newly integrated customer data in order to improve both guest and franchisee experiences with the company - in real-time. "When we started this, no one else in the hospitality industry had done it," says Thomson. "We'd really like to continue that lead."
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