hitec 2012 tutorial next best action to drive bookings rev par
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Presented at HITEC 2012. The good news for hoteliers is that there are encouraging signs in the economy and according to recent reports RevPAR continues to trend up. However, that does not mean hoteliers don’t need to continue to focus do a better job on attracting, converting customers and driving higher on property spending and engendering loyalty for repeat purchase. It’s not for a lack of data on the customers – the data exists in reservation systems, loyalty databases and information that consumers are sharing on social networks. But very few have been able to harness this data in any meaningful way. Marketers have long attempted to connect with customers through traditional campaign management tactics, inundating customers with irrelevant and inconsistent offers and experiences. The result is unhappy customers, low offer conversion rates and excessive customer churn. To succeed, marketers must deliver a set of intelligent and coordinated messages across all channels, including inbound channels such as the contact center and Web, and outbound channels such as email, social media and mobile to deliver the right offer to the right person at the right time. Marketing organizations looking to make a significant impact on the customer experience and drive effective return on marketing investment are turning to a Next-Best-Action approach.TRANSCRIPT
© 2009 Ness Technologies
Using Next-Best-Action to Drive
Higher Booking Conversion and
RevPAR
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Today’s Speakers
Thomas Kaplan
National Account Executive
Glenn Gruber
AVP, Travel Technology Solutions
Ness Technologies
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Hotel Distribution and Merchandising Challenges
The Power of Next Best Action & Real Time Decisioning
Q&A
Agenda
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Number of Online Researchers and
Bookers Are Growing
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Something Doesn’t Track
Researchers
5:4 Bookers
Lookers
4,500:1 Bookers
We are not giving people what they want
Source: eMarketer, Pegasus Solutions
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So We Try So Many Things
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It’s Exhausting
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Right Channel
• Right Offer
• Right Time
• Right Guest
Booking
But the Key is…
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Hotel Industry Reliance on OTAs
Source: DigitalIQ Index: Hotels 2012, L2 ThinkTank
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Inspiration
Research/Plan
Book Explore
Share
The Traveler Life Cycle
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Pre-Stay
Arrival
On-property
In destination
Departure
Post Stay
Six Hospitality Touch Points
Adapted from RockCheetah LLC
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Business Trip
Family Vacation
Weekend with the Guys
Conference
Romantic Getaway
Persona-lization
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Persona
Purchase Channels
Loyalty Database
Purchase History
Email/IP address
Semantic Data
Social Media
You Already Have a Lot of Data
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Is This What We’re Down To?
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Don’t Confuse Hope with a Plan
Pega: NBA &
Decisioning
Solution
Optimize Customer
Value Through Next-
Best-Actions & Decision
Management
17 © 2012 Pegasystems Inc.
18 © 2012 Pegasystems Inc.
Marketers Face Big Challenges
19 © 2012 Pegasystems Inc.
The Shift to Real-Time Marketing Marketing Program Optimization
Web, social, mobile, call center, etc.
Next-Best-Action
Inbound and outbound coordination
Personalized marketing programs
Ma
rke
tin
g E
ffic
ien
cy
Multi-Channel Campaigns
Campaign Management
Mass Marketing
Single business process
Multi-channel and multi-wave
Feedback loop
Outbound campaigns
Reporting and KPIs
Centralized management of
campaign processes
Manual approach
Email and basic channels
Marketing Effectiveness
Real-Time
Marketing
20 © 2012 Pegasystems Inc.
21 © 2012 Pegasystems Inc.
Typical Offer Management Decisioning Based
Offer Management
Eliminating Averages
Offers Budget Based on Average
Customer Value in a given
Customer Segment
Personalized offers allow balancing budget, customer needs and customer
satisfaction
Offer based on individual customer
value
22 © 2012 Pegasystems Inc.
Our Offer
Jim Johnson
Jane Doe
John Smith
Campaign-based Marketing • Start with an offer
• Use segmentation to select customers
• Matches organisational structure
• Executed in advance
• Low/medium customer relevance
Jim Johnson
Jane Doe
John Smith
Next-Best-Action Approach
For each customer determine which proposition (offer) is most appropriate for that
customer at a point in time
Offer 3
Offer 2
Offer 1
A More Relevant Approach to Marketing
Offer 2
Offer3
Offer 1
Next-Best-Action Marketing • Evaluate each customer
• Find best offer for customer
• Executed at moment of truth
• Matches customer expectations
• High customer relevance
Traditional Approach
…And Pega does Both!
23 © 2012 Pegasystems Inc.
Complimentary Approaches to Analytics
Re-Use Existing Offline Predictive Models
Augment with unified Predictive Models
Extend with Self-Learning, Adaptive Models
Predictive & Adaptive Models can be used independently or together in a Champion-Challenger approach
24 © 2012 Pegasystems Inc.
End-to-End Decision Management Capabilities
Control
Planning, Simulation, Monitoring, and
Management
Customer Driven
Agent Assisted
Outbound Channels
Delivery Deployment
Centralised Decision Hub
Existing Disconnected Data Sources: Rev. Mgt. System / Loyalty System/ CRM
Existing Apps:
Strategy
Next-Best-Action Strategies
Collaborative Strategy Design & Reuse
Insight
Third-party Predictive Models
Offline Predictive Models
Adaptive Models
25 © 2012 Pegasystems Inc.
Next
Best
Action
If there are no risks, what
sales proposition should
be made and in what
way?
Upgrade
Propensity
Disc. Xtra
Night
Propensity
Double
Points
Propensity
Upgrade
Eligibility
Xtra Night
Eligibility
Double
Points
Eligibility
Upgrade
Proposition
Xtra Night
Proposition
Double
Points
Proposition
Best
Offer
Is there a retention risk?
If so, should we invest in
client retention based on
perceived lifetime value?
If so, how to retain?
Value
Prediction
Retention
Proposition 1
Retention
Proposition 2
Champion
Challenger Retention
Matrix
Retention
Prediction
What is the purpose of the
interaction? Call
Reason
Service
Strategy
Is there a conversion risk?
If so, how to respond?
Mitigation
Strategy
Long Term
Value
Risk
Prediction
Exposure
Current
Arrears
Value
Prediction
Decisioning Strategy Illustration
26 © 2012 Pegasystems Inc.
Case Study: Vodafone
Goals and scope Optimize customer experience and customer value
KPIs on revenue and margin stimulation and
reducing churn and cost of retention
Consistency across enterprise- 18 Companies
Group standard for centralized decisioning Quality: Improved NBA driven dialogues for cross sell
and retention
Quantity: improved targeted NBA communication across
all channels (contact center, retail, web, IVR, outbound,
mobile…)
Agility: improved business command and control to
change strategies quickly
Approach and results Hundreds of millions of additional profit annually
>225M Vodafone customers have experienced NBA-
driven interactions
Implemented 8-10 countries in first two years, 12
countries currently live
27 © 2012 Pegasystems Inc.
Pega NBA - Decision Management Benefits
Faster time-to-market: Leverages the power of predictive and adaptive decision models to drive smart and targeted marketing outcomes that take the next best action.
Better decision outcomes: Decision changes can be tested and simulated to understand accuracy and impact
Increased automation: Manual, redundant decisions are eliminated by automating decisions that drive key business processes
Integration with all of your disparate marketing technologies and coordinate all activity in one unified platform.
Improved decision visibility and control: Business users can author, monitor, and audit decision changes
28 © 2012 Pegasystems Inc.
The Result: Elevate Your Goals
Optimize Customer Lifetime Value
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www.ness.com
Let’s meet now
Come to the Ness Technologies booth #1851
Ping me after the conference
► 781.249.4049
► Twitter: @ggruber66
Let’s Continue the Conversation