The Beginner’s Guide to Hotel Loyalty Program Software [2022 Edition]
A Hotel Loyalty Program Software does so much more than helping you create captivating loyalty programs. In this ultimate guide, we'll go deep into each component of these systems.
By the end of it, you'll have a grasp of everything you need to know about these systems - from the types of software, key functionalities to integrations and beyond.
The Beginner’s Guide to Hotel Loyalty Program Software [2022 Edition]
What We Will Cover:
An Introduction to Hotel Loyalty Program Software
A hotel loyalty program software is a powerful system that collect, store and organize customer information. It often consolidates guest information across multiple properties or data sources into one centralized database.
Giving hoteliers access to a condensed guest profile view so employees, like the guest relations teams, can get access to 360-degree actionable insights over the guests’ demographics, stay behavior, communication methods, their preferences and more.
It is not unusual for the system to be divided into individual models catering to particular areas. Sometimes it can be a marketed-oriented model like hotel email marketing, or functionalities catering to loyalty programs and rewards management.
Types of Hotel Loyalty Program Software
Hotel loyalty software comes in a variety of different sizes and shapes. Some are generic and can be applied across industries, while others are more specific to their industry. Here are some examples of commonly used systems:
1. Generic CRM
Generic software is those built for any type of industry. Whether it be an e-commerce business, flower shop, or a manufacturer. Examples like these would be Monday, Really Simply Systems, HubSpot and FreshWorks.
Because these systems are not designed specifically for a given industry, it often proves difficult for hotels to integrate these systems with a hotel's property management system (PMS). This, in turn, causes the data in the system to be siloed, and the system to be run as a complete independent and disconnected system.
2. Basic CRM Software
These are constrained to the very standard features of a CRM – namely, collecting, storing, and displaying customer data in a visually pleasing way. Unlike the generic software, these ones are able to connect with the PMS using a 2-way interface.
These systems may be able to capture, process and organize the data from multiple properties into one centralized hotel database. They may also include data sources from third-party applications of platforms such as social media, hotel reputation management software, or hotel surveys.
3. Loyalty-Focused Software
These systems – similar to the basic software – come with a centralized database for organizing hotel guest data. But aside from building main guest profiles containing multiple sources of data. They have a larger focus on the guest relation aspects. As such, they can often display key socio and behavioral factors like the guest's preferences, their hobbies and more.
This software includes functionalities relating to building and managing a loyalty program. This could range from building multi-tiered loyalty program, set up incentives, points, and rewards management.
4. Marketing-Focused Software
Marketing-oriented CRM software include a centralized data warehouse, plus components for building and managing email marketing activities. They allow users to create their own email templates within the system through a WYSIWYG HTML Editor/Template Editor.
They come with automated features such as pre-scheduling email campaigns, drip-campaigns, and one-off campaigns. As well as the ability to create segmentation, perform A/B testing, and access to key reports where users can view marketing metrics like open rate, click-through-rate, conversion rates and more.
This type of hospitality crm software package has all three of the core components necessary for a CRM. These include the centralized multi-hotel/brand solution with a centralized data warehouse, loyalty and award management modules, and email builder and email automation features, as well as hotel sales pipeline management.
What Are Some Key Features of a Hotel Loyalty Program Software?
CRM systems are packed with a wide range of functionalities to help hoteliers build loyalty with their guests. Although the features may vary from the vendor, it often boils down to seven main functionalities.
1. Centralized Data Warehouse
A centralized data warehouse lets hotels scrape data and aggregate it from multiple sources (such as their PMS, social media, and reputation management system) into the system.
A centralized data warehousing is like a data bank. It can extract information from all sources, then transform and be processed into meaningful data. KPMG
This allows your hospitality loyalty program software to view, store, and share all your important data in an orderly fashion for reporting and creating rich guest profiles that holds data from various sources. Whether it be demographic information, their social media profile, past stay behavior in your properties, and more.
2. Hotel Market Segmentation List Builder
Marketing-oriented hospitality CRM offer you the capability to unlock on your most valuable asset - namely allow you to organize your guest data into groups to extract the value of it. It often works by creating user segmentation and profiling by grouping people who have similar characteristics.
Typically, this is done by looking at defined variables. Such as the guest's age, gender, number of stays, average daily rate, preferences, and so forth. These segments are particularly useful in e-mail marketing to create targeted e-mails.
3. Hotel Email Marketing and Automation
The e-mail marketing features often include an email marketing template management system that allows you to create templates for your marketing initiatives, by simply dragging and dropping them into an already built-in template or by customizing the existing ones.
Often, the ability to pre-schedule email campaigns is included, such as sending special emails to customers or triggering emails to go out when a guest has a certain event. You can read more about hotel email marketing best practices here!
4. Hotel Guest Feedback System (Comment Cards/Reviews)
These types of modules allow you to record your guest complaints, and other relevant feedback – often through the shape of hotel surveys – and present it visually into graphs and charts. Certain guest feedback platforms can pull data from third-party sources like TripAdvisor, Booking, Facebook, etcetera to display reviews or feedback on other channels.
5. Loyalty Program Builder
A module dedicated to designing, organizing, and customizing the loyalty-building blocks with a hotel loyalty program. This includes the ability to set up the program, define points accumulation per spending dollar/stay/nights, configure tiers and the associated tier model for member recognition, and create rewards and incentive management, partners, voucher definitions, benefits, and much more.
6. Hospitality Analytics and Dashboards
Most CRM systems would include a hospitality analytical section, where all its information is aggregated and presented in a meaningful way through for example a dashboard.
The amount of data its able to present depends on which modules you have activated. But it is not uncommon for hoteliers to be able to track loyalty enrollment figures, spending and revenue figures, marketing conversion rates, and more.
7. Hotel Lead Management Solution and Sales Pipeline
A series of hospitality CRM nowadays offer lead management capabilities. Including better visibility for hotels to better manage incoming sales opportunities and track them as they progress across the buyer's journey.
On-Property Systems versus Online Cloud-Based
The two most common types of deployment are cloud-based and on-property CRM. In recent years, there has been a big transition to cloud-based solutions – particularly when it comes to CRM solutions.
Cloud-based systems are housed in the cloud and the vendor hosts all your CRM information remotely accessed through an internet connection. While in on-property deployment, the software involves on-site servers.
The advantage of cloud-based systems is that it is accessibly from any device, you simply just need an internet connection to access it. It requires less upfront capital expenditure on building and IT infrastructure or data center on the property. And it is easier to scale the services such as increasing or decreasing the data storage capacity!
Whereas, for the on-premises system, it is often kept locally and can only be accessed via a desktop application, requires a hefty initial capital expenditure, and is less scalable. But the advantage is that your data is located "closer" to home as it is all on-premises and doesn't leave the hotel at the mercy of a third party.
Why a CRM Built Specifically for the Industry Makes a Difference
While there are many generic software packages out there that have a good value proposition, they may not be as competitive as a hotel's software. It is important to note, compared to other businesses, hotels collect a vast amount of customer data.
Unfortunately, the data is spread across multiple sources. Whether that would be third-party booking channels like Booking.com, review sites like TripAdvisor – or simply the hotel's own PMS.
At the end of the day its primary function is to support you to adopt a customer-centric business culture dedicated retaining guests. To have an effective system that will go hand in hand with your CRM strategy, you need to align it from top management down to your business processes.
At its core, you must have a two-way interface with your PMS. Otherwise, the CRM will act in complete data silos and be run as an independent system, which will ultimately hinder your ability to leverage the full potential of the system.
Why Is CRM Important in the Hospitality Industry?
Customers are the lifeblood of any hospitality business, and due to the prevalence and importance of intangible products like “services” in the industry, a CRM plays a more critical role here compared to other industries.
And this combined with the perishable nature of the product, changing guests' expectations, the rivalry between competitors, and the power of third-party channel distribution channels makes it important for hotels to focus on building long-term relationships with their customers.
What Are the Advantages of Hotel CRM?
A CRM solution can be used in multiple ways and provide many advantages. Here are 8 key benefits of a CRM.
1. Condense multiple sources of data into a centralized database.
2. Extract a rich array of detailed reports to support decision-making.
3. Easier for staff to develop a deep bond with guests.
4. Create targeted and high-converting marketing campaigns.
5. Increase revenue through repeated customer purchases and loyalty.
6. Improve lead conversion by organizing leads through a pipeline.
7. Group guests into distinctive segmentation for personalized communications.
8. Automate communication between the hotel and guests.
What Are the Possible Disadvantages of Using a Hotel CRM?
As with everything, there are two sides to the coin. Here are 5 disadvantages you should keep in mind.
1. The initial capital expenditure to deploy the system.
2. Greater responsibility and risk when it comes to sensitive guest data.
3. It can be challenging for employees to navigate the system.
4. Data cleansing process is costly and complicated.
5. Requires an effort and commitment across the board, from top-level management to employees.
Luckily, there are a series of actions you can undertake to overcome the most common disadvantages of hotel CRM. Including: creating synergies from top-management to business processes before implementation, outsource the data cleansing process to the vendor, and choose a modular/tiered-pricing CRM.
What to Look for When Choosing the Best Hotel Loyalty Program Software?
CRM systems are a great way to build loyalty in your hotel operations, but the most important factor is they to add value to your business. To help you make an informed decision, we´ve highlighted 2 key factors you should look into when choosing a vendor.
1. Choose a Vendor That Fits Your Needs
Everyone's needs are unique - there is no "one-size-fits-all" in the hotel industry. It's important to have the right tools to meet your needs, whether you are a 50 room single property or a large group of properties.
At the end of the day, you want to find a vendor that can provide your business with the features you need and support your long-term hotel CRM strategy. Start by identifying what your long-term CRM strategy is and then list out each problem you have. Get together with your sales team, receptionist, and guest relations to see what you can identify. Try to think of ways how a CRM platform would help you to overcome these issues. Besides that, the system should be able to grow as your business expands.
2. Evaluate the Vendor’s Experience
There are a lot of CRM vendors out there - from small start-ups to large multi-enterprises and industry-specific vendors. Let's be honest. A CRM is a big investment for a hotel, and it is not uncommon to commit yourself to one vendor, for many years to come.
When it comes to the hospitality industry, you should be sure to choose a vendor that has experience working in hosting industry.
By looking at their current client portfolio, you´ll get a better idea of how they will function in your establishment. The interfaces they offer are also an indicator. - and not to forget their ability to store your sensitive data in compliance with regulations and in a secure manner.
Why Choose Metasphere?
We at Metasphere have built a highly scalable and all-in-one CRM solution for hotels. Our software allows hotels to know their guests better and reach them with the right content, communication methods, and services at the perfect time, with the help of predefined segmentation, email automation, and lead and loyalty management.
The system is designed to be scaled and adapted according to your business's growth and to help you keep up with today's ever-changing environment.
Do you want to see how we help hotels, just like yours, improve lead conversion rates and effectively nurture guest loyalty? Book a free demo below.
Let´s Conclude Our Beginner’s Guide to Hotel Loyalty Program Software [2022 Edition]
Wow, that was a lot of information. But let´s break it down a bit. Here’s what you should take away from this article:
What is a Hotel Loyalty Program Software? A tool that can consolidate data across multiple sources to create a condensed guest profile. It comes with a variety of modules to make it easier for you to nurture guests, run better marketing campaigns and convert leads to sales quicker.
What Are the Types of Hotel Loyalty Program Software? The commonly types of programs include generic/non-industry specific, basic CRM with centralized database, loyalty-focuses, marketing-focuses and all-in-one solutions.
What Are Some Key Features of a Hotel Loyalty Program Software? It boils down to six key features: centralized database, market segmentation builder, email marketing and automation, guest feedback, loyalty program builder, analytics/dashboards and pipeline management.
Why Is CRM Important in the Hospitality Industry? Customers are the lifeblood of any hospitality industry. And due to the unique characteristics of the industry, it's vital for businesses to focus on guest loyalty - and this is more easily done using a CRM.
What to Look for When Choosing the Best Hotel Loyalty Program Software? Two key things! Choose a vendor who fits your business needs and has experience working with properties just like yours.