In the world of hospitality marketing, data is an invaluable asset. It provides insights into customer behavior, preferences, and interactions, allowing marketers to deliver personalized experiences. One type of data that holds immense potential is first-party data. In this post, we will explore what first-party data is, its benefits, and how hotel marketers can leverage it to create exceptional customer experiences.
Exploring Different Types of Data
Before delving into first-party data, it's essential to understand the various types of data marketers commonly use.
First-Party Data - Think Hotel PMS or CRM
First-party data refers to the information collected directly from a hotel’s customers and owned by the hotel itself. It encompasses data about customers' digital interactions, purchase history, behavior, preferences, and more. Marketers can leverage this data to create targeted ads, personalized content, and tailored experiences based on individual interests.
For instance, a property can use first-party data, such as web or mobile app behavior, in-property or call center interactions, purchase history, and loyalty status, to craft a customized ad for a specific customer.
Second-Party Data - Think OTA
Second-party data is first-party data obtained from trusted partners like Expedia or Booking. Collaborating with a partner allows a hotel to expand its dataset beyond its own collected information. Since second-party data isn't openly sold, it holds greater value compared to third-party data, which is widely available for purchase.
For example, a hotel might receive customer information from a partner such as an OTA; they can use this to create marketing materials for specific customer needs.
Third-Party Data - Think ExactData
Unlike first-party data, third-party data is sourced from external entities that have collected the data. It often comes from diverse sources across the web and is aggregated, segmented, and sold to companies for advertising purposes.
A scenario you can think about is when a ski lodge aiming to target skiers in Colorado might purchase a list from a data company containing internet users in Colorado who have previously shopped online for skis. The ski lodge can then display ads to those users.
Harnessing the Power of First-Party Data
Traditionally, marketers have relied on third-party data sources to enhance their targeting strategies and reach potential customers. However, retaining existing customers is more cost-effective and profitable than acquiring new ones. Repeat customers tend to spend more with a property, and a small percentage of loyal customers accounts for a significant portion of future profits. Furthermore, these customers have already provided a valuable asset: first-party data.
Marketers understand that first-party data offers the highest return on investment compared to other data types. However, many struggle to fully leverage its potential due to a lack of appropriate technologies and data strategies. Consequently, they often turn to third-party resources to compensate for the gaps.
While third-party data can enhance acquisition strategies, it fails to provide insights into a customer's relationship with a property and their journey to purchase. Moreover, third-party data is not exclusive and can be easily obtained by competitors, not to mention concerns about its quality, accuracy, recency, and cost.
In the current era of consumer empowerment, creating personalized and highly targeted experiences that drive brand loyalty and retention requires understanding and responding to customer wants, needs, and intent with contextual relevancy. And what better way to achieve this than by utilizing the actual data that captures every customer interaction with your brand?
First-party data is fresh, usually free, and exclusively yours.
Unleash the Power of Your Most Valuable Resource
First-party data serves as the bedrock for comprehending your guests on a deeper level. Unlike the behavior of lookalikes that occurred weeks or months ago, first-party data is derived from genuine interactions individuals have had with your hotel across a wide range of touchpoints, both historical and in real-time. It is the data that guests willingly entrust to you in exchange for your exceptional products or services found at your hotel. It is the only data that provides the crucial insights and control necessary to recognize, relate to, and respond to your guests in ways that are truly meaningful and valuable.
The utilization of first-party data for marketing to existing hotel guests has evolved. This is due to the advancement of customer intelligence solutions. Marketers can now integrate a hotel’s offline and online first-party data, enabling them to reach and engage actual customers at any stage of their decision journey. Hotels are expecting more from their first-party data, and many are planning to enhance strategic utilization in the coming years.
Sources of First-Party Data
In today's complex and ever-changing landscape, consumers interact with Hotels through multiple devices and channels, both digital and offline. The significance lies not in the number of channels used but in creating exceptional brand experiences that delight customers and inspire repeat engagement.
Different touchpoints allow hotels to gather rich first-party data about their customers. The proprietary data can be connected to individual guest profiles. Creating the resolution of identity and fostering a deeper understanding of guest behavior, preferences, and their position in the buyer journey. To maximize the potential of this data, marketers need to strategically consider their digital interactions and the offline repositories where guest information is stored.
To tap into the benefits of first-party data, gathering the right data from the right sources is essential. First-party data can be obtained from various places, including:
- Website: A brand's website can provide a wealth of data on site visitors, ranging from names and email addresses to visitor behavior and transactions. Additionally, first-party data can be harvested from PDF downloads - such as wedding planning guides, F&B menus, and floor plans.
- Purpose-Built Mobile Apps: App users are often a hotel’s most loyal supporters, having made the effort to download the app. Marketers can extract valuable data from hotel apps by defining meaningful user events and tracking and measuring them.
- Email and SMS: since the early days of digital marketing, metrics such as open rates, click rates, and bounce rates are providing valuable insights. The granular data about email engagement allows marketers to segment audiences and run targeted campaigns on different levels of engagement. Similar to SMS data, customers who allow Hotels to engage with them via SMS mean the customer has a high level of interest in the brand.
- Point of sale and CRM: Offline data, such as purchase history, can be a brand's most valuable asset for online targeting and activating its top customers. This data is also instrumental in measuring and analyzing sales performance, enabling Hotels to identify trends and areas for improvement.
Property-based or centralized call centers play a pivotal role in customer interactions, often serving as the hub for new account initiation and problem resolution. While many properties have made significant investments in automation, systems, and training to enhance selling and service, the wealth of valuable data generated in call centers should not be overlooked.
Understanding the holistic customer journey means hotel marketers should utilize first-party data to improve marketing performance. Through integration from all touchpoints, hotel marketers can get different insights that will help them create a bigger picture.
Leveraging First-Party Data
- Enhancing Targeting Precision: To achieve accurate addressability and targeting efficiency, hotel marketers must shift their focus from cookie-based tactics to strategies that utilize a hotel’s first-party data. By leveraging this data, marketers can identify real individuals across devices and channels, enhancing accuracy and relevancy and reducing ad waste while driving ROI.
- Mapping the Customer Journey: Integrating and accessing first-party data allows marketers to map the buyer journey comprehensively. By understanding the different steps consumers take on their path to conversion and the order in which they take them, hotel marketers can deploy the right message at the right time and place. This valuable insight informs strategies to re-engage customers and guide them toward conversion.
- Creating a Single View of the Customer: Customers engage with hotels across various touchpoints, both online and offline. This results in multiple individual and anonymous profiles for each customer. By merging these profiles into a single customer view, hotel marketers gain a deeper understanding of customer behavior across different channels, devices, and platforms. This knowledge enables them to inspire action and optimize marketing efforts.
- Advancing Omnichannel Measurement: By connecting data from all channels, properties can gain insights into how customers transitioned from one channel to another before completing a purchase. This comprehensive view empowers marketers to segment audiences, optimize campaigns, and guide behaviors that drive conversion. CoMMingle360 is a perfect example of omnichannel hotel marketing.
- Closing the Loop on Attribution: Leveraging insights from first-party data allows marketers to influence media allocations and budgets effectively. Understanding how each touchpoint in the customer journey impacts conversion provides a more accurate attribution analysis. Hotel marketers can identify how budget shifts affect online engagement and in-store sales, enabling smarter decision-making.
- Increasing Relevancy: First-party data provides hotels with accurate intelligence to tailor messaging and shape personalized customer experiences. By leveraging customer insights across touchpoints such as interests, preferences, location, and purchase history, marketers can design unique on-property experiences that resonate with individual customers.
Despite the clear advantages of using first-party data, there are challenges that hotel marketers must overcome:
- Lack of a Data Strategy: Creating a data strategy is crucial before resolving data-related challenges. Marketers need to understand their data sources and what data they collect and map it across the guest journey. Customizing the strategy to align with relevant touchpoints is essential.
- Integrating Data Across Platforms: Integrating data from fragmented third-party technology partners can be a complex task. While these partners have collected data on behalf of hotels, consolidating the data into one place is necessary to gain a comprehensive understanding. Purpose-built tools are often required to pull data from multiple channels.
- Resolving Identity and Building Profiles: Due to the diverse channels customers use to engage with hotels, customer data exists in multiple profiles across various platforms. To unlock the potential of first-party data, merging these profiles into a single view is essential. This consolidated customer view enables hotel marketers to deliver targeted messages without wasting resources.
- Taking Action in Real Time: The value of data diminishes over time, so distributing data to internal and external media execution partners in real-time is crucial. This allows Hotels to capitalize on the knowledge gained.
Getting Started: Elevating Your First-Party Data
Unlocking the full potential of first-party data requires a comprehensive approach. However, effectively collecting and acting upon first-party data across various touchpoints in a customer's journey is no small feat. To help your hotel on this journey, here are four essential steps to elevate your first-party data:
- Develop a roadmap for your first-party data. First-party data forms the bedrock of an omnichannel marketing strategy, enabling hotels to achieve lower-funnel objectives like customer loyalty, retention, and upselling. Start by defining your marketing and customer experience goals and identifying the tactics and analytics needed to execute your strategy. Create a roadmap outlining the evolution of your cross-channel marketing capabilities over time. Breaking down this long-term effort into smaller projects will yield incremental ROI at each stage.
- Identify the right data sources and data points. Conduct a thorough audit of your data sources (i.e., PMS, CRS, CRM) to determine the type of data being generated and how it's being measured. Cross-reference these sources and data points with the requirements of your marketing and analytics use cases. Ensure that you are collecting data that aligns with your objectives.
- Extract more value from your hotel data. Leveraging first-party data is paramount to creating personalized and impactful customer experiences across various contexts. Integrate offline and online data into a comprehensive hotel-wide identity asset to fuel customer-centric programs that align marketing, product, and service.
- Continuous benchmarking and monitoring of progress. Regularly evaluate your first-party data capabilities, track progress, and integrate learnings at each step.
Laying the Foundation for Long-Term Success
Third-party data alone no longer suffice. Forward-thinking hotels are recognizing the boundless potential of first-party data in driving marketing success. Most hotel marketers with a vision to increase their utilization of first-party data view it as the linchpin of their data-driven marketing strategies.
By leveraging a hotel’s complete first-party data to resolve customer identity, marketers can establish a data asset that underpins all guest engagements—across websites, mobile apps, physical location, email, digital ads, call centers, and more. Empowered by intelligence, hotel marketers can extend their reach across channels, cultivate lasting customer relationships, boost retention rates, and drive brand revenue.
Certainly, keeping pace with today's consumers is challenging as they seamlessly transition across channels and devices. However, armed with the right technology and a customer intelligence strategy rooted in first-party data, you'll discover that the most direct path to success begins and ends with the data you already possess.