What publishers can learn from the hotel industry
Few people would argue that now, more than ever, we are living in an era of mass disruption – a phenomenon that has affected every facet of our lives and every industry on the planet. No one is immune to its power.
For many it evokes fear, uncertainty and doubt about their future; for others, it stirs passion, creativity and confidence.
To which group do you belong?
Working in the publishing industry, I meet more members of the first group, while my colleague who works closely with our business partners in the hospitality industry encounters more in the second.
It’s not like hospitality is experiencing less disruption than publishing. Both industries are feeling the profound effects of dramatic changes in:
But as they perceive and address them in different ways, the publishing revenues continue to decline year after year, while the hotel industry’s, after 2008’s recession blip, continue to rise despite the threats of atypical competition (e.g. Airbnb, HomeAway) which is driving today’s sharing economy.
So what are hotel executives doing differently than traditional publishers? They are focusing on people rather than profits, letting go of past traditions of “what worked before”, and rethinking the way they do business.
Newspaper publishers are
|Innovating to create new products and services people are willing to pay for||Still looking for people to purchase products they don’t want to buy|
|Investing in behavioural analytics to personalise marketing and experiences||Not capitalising on the power of Big Data|
|Focusing on customer experience||Focusing on mostly commoditised content and cash|
They say the devil is in the detail, so check out some of the specific tactics behind their strategies…
↑ Hotels are innovating to create new products and services people are willing to pay for
By 2017, millennials are expected to replace Baby Boomers as the leading consumer. For people-centric businesses like hotels, it means a dramatic shift in how they define and deliver quality.
Less brand-loyal millennials crave novelty over “no surprises” predictability, which puts some established brands on the “don’t stay” list with these younger travellers.
Meanwhile other more progressive chains are innovating outside of a Baby Boomer’s comfort zone with millennial-friendly venues like Tru by Hilton, Radisson Red and citizenM, where you won’t see bellboys, pillow chocolates or trouser presses, but you will see:
- Minimalist luxury at affordable prices
- High tech everywhere
- Complimentary Wi-Fi and on-demand movies for the 85% of today’s travellerswho believe internet access should be free
- Open, bar-centric communal spaces, facilitating social interaction and multi-tasking
- Food and beverage services designed to meet the needs of the mobile traveller with more grab-and-go, snacking/grazing and special dietary options
- Living room-like lobbies with 24/7 food and cocktails for the 36% of millennials that would prefer to work outside of their rooms
↓ Publishers are still looking for people to purchase products they don’t want to buy
The late media planning guru, Erwin Ephron once said, “Reach trumps frequency. It’s media’s gift to advertising.” Following the contagious drop of commenting features off of publishers’ websites and the rush to post content on the likes of Facebook Instant Articles and Apple News, it does appear that the drive of readers away from publishers’ own digital properties will continue to accelerate this year.
Now, don’t get me wrong, reach is very important, but choosing the right distribution channels should be based on the value they bring beyond eyeballs to a publisher’s content. Reach is one of the table stakes in the new future for news, which according to futurist Ross Dawson has three pillars: trusted aggregation, community and commerce.
Aggregation offers opportunity for discovery and reach, but to truly grow and monetise a community, publishers need to find new innovative ways to create connections between people through content.
Forgive me if I sound like a broken record, but I can’t help but preach how critical it is for publishers to invest in the reinvention of their business models, content, products, services and marketing to create a more profitable future.
Think outside the broadsheet people! Experiment, prototype and build products and experiences that surprise and delight today’s consumers…
- Diversify beyond the printed word to engage with readers between page flips
- Adopt new advertising solutions that engage rather than enrage readers
- Build loyalty by listening, learning and evolving to give people what they want
- Invite readers to participate in the news and reward them for their contributions
- Capitalise on millennials’ willingness to pay for memories and new experiences by integrating content into new business lines such as immersive entertainment (e.g. virtual reality and gaming).
- Exploit new technologies (e.g. geo-targeting, IoT) where your content adds value. Did you know that by 2020 a quarter billon vehicles will be connected? Will your content be in them?
And above all else, always remember to put “the person” at the centre of everything you do!
↑ Hotels are investing in behavioural analytics to personalise marketing and experiences
The hospitality and travel industries were putting customer experience at the top of their agendas long before Big Data became so popular. So it’s no surprise that when data and behavioural analytics started to take off, some of the more tech-savvy hotels started using it to enhance decision making, anticipate guest needs and be more proactive on delivering superior services throughout the customer’s journey with the brand.
Here are how some hotels are personalising their guests’ experience based on their needs and preferences to differentiate themselves from the competition.
- Four Seasons allows guests to choose from one of three mattress toppers and remembers their choice for future stays.
- Marriott and Hilton keep track of guests’ floor and feature choices and uses that data to automatically book them in a room that closely meets their past selections.
- Kimpton Hotels track what members eat, drink and share on social media. It then rewards them from time to time by surprising them with their favourite beverage and snacks in their rooms at check-in.
- Hilton tracks user data and uses it in real time to let staff know to which guests they should offer perks based on their loyalty and profitability to the chain.
- Best Western tailors in real time which email variants reach their 20 million customers based on their detected device. The results show a 143% lift in downloads of their app by non-members. It is also seeing higher click-through rates in email campaigns by using geo-targeting to provide more relevant offers to customers based on where they are at any point in time.
↓ Most newspapers are not capitalising on the power of Big Data
According to newspaper industry author, Martha Stone, “Big Data is a huge opportunity for media companies, but media companies in general are still far away from extracting maximum benefit from a Big Data strategy.”
Well-known media analyst, Ken Doctor, agrees, “I’ve been urging publishers to think about business intelligence, also called analytics, or data science. It is becoming the centre of every media business. You have to have knowledge of your customers and what they’re reading and want to read, and similarly of your advertisers and what they want and how well you’re performing. Without that core of business intelligence, you’re flying blind at this point and by 2020 you won’t have any business left.”
The big names in publishing are investing in big data, but when it comes to smaller regional titles, the surface is a hardly being scratched beyond Google Analytics.
↑ Hotels are focusing on customer experience
Last year a study by ZenithOptimedia reported that millennials put more value on experiences than possessions. The Allianz Travel Insurance Vacation Confidence Index also showed that 60% of them trust the sharing economy. So it’s not surprising that start-ups like Airbnb and Home Away are having so much success with these younger consumers.
By offering travellers one-of-a-kind accommodations, mobile-friendly technology and unique experiences they couldn’t get with established chains, these disruptors started attracting guests who were disgruntled by the devaluation of their loyalty programmes by hotels that started to put profits before people.
It’s not dissimilar to the situation that occurred in music and video where disruptors like iTunes and Netflix radically transformed the business models of these industries. Thankfully the hotel industry doesn’t appear to be falling into the same profitless pit as record labels. Many are exploring new and better ways to give the modern consumer what he/she wants – convenience at the right price – by joining the 89% of companies that plan to compete in 2016 on the basis of customer experience.
Now, you’re probably thinking, “What’s so new about that? You just said that hotels practically invented the concept with rewards programmes and their focus on creating memorable experiences (e.g. weddings, graduation parties, honeymoons, etc.)”.
And you’d be right. But in today’s digitally- and socially-disrupted world, it takes a lot more than points to entice loyalty with the modern traveller. So how does one excel at customer experience in this digital age?
According to Colin Nagy of Skift Magazine, “Customer experience is 3D chess. It is the aggregate of thousands of micro experiences a customer has with your brand and it presents countless opportunities to engender loyalty. There are myriad variations and outcomes, all of which need to be thought out and stewarded appropriately.”
The need to capture, analyse and act on these micro-experiences is driving heavy investments in technology-based solutions for hotels including Cloud-based Property Management Systems (PMS). Gone are the days of boring in-room self-promoting videos, surveys and printed newspapers outside the door. They’re being replaced by self-serve apps for check-in, e-menus, loyalty programmes, payment processing systems and mobile amenities.
Loyalty is being fostered more through emotions than transactions. Signature Moments – novel rewards designed to surprise and delight guests – are helping brands create emotional connections with travellers.
Flexibility, simplicity, customisation, and personalisation are key trends in the new cradle-to-grave processes of booking a stay at a hotel — from the first marketing connection, to website, app, email and SMS interactions; and from parking, lobby, front desk, restaurant, bar, room and amenity experiences, to check-out and post-stay dialogues.
↓ Newspapers continue to focus on mostly commoditised content and cash
In hospitality the customer is king, but not so much in publishing where readers often play second fiddle to content (including advertising) and the digital dimes it delivers.
Notwithstanding the short list of publishers who value what their readers have to say, most media execs pay lip service to customer experience, sending their readers off to social media if they want more than a digital form of monologue journalism.
Traffic, views and clicks seem to mean more to publishers than their relationship with their readers. Instead of investing in improving the user experience on their digital properties to keep ad blockers at bay, they penalise people by blocking those who use ad blockers or beg them to turn them off.
It’s time for publishers to stop looking for the easy way out when faced with satisfying the new consumer. Instead, they need to make a habit of treating readers as kings and queens and provide them with a personalised and superior user experience. If not, they will continue down the same old road to rags, rather than to riches.
Embrace the Connection Economy
Unless you’re a follower of thought leader Seth Godin, you might not have heard about the “Connection Economy”; and if you have heard about it, you may see it as just another piece of overused marketing jargon… but you would be wrong.
Like it or not, the days of marketing to the masses are over. Standardisation, economies of scale, and conventional wisdom to serve the largest market possible (i.e. the rush to be average) are being upended by a new economy where value is created by the connections we make, not through industrialisation.
Fuelled by humanity and enabled by technology, the connection economy empowers people to do what they do best and lets them do it at a colossal scale – connect. And through those connections they can create the extraordinary, do something important and make a difference.
People crave connection and the businesses that can offer more connections are the ones poised to create more value.
Hotels haven’t quite figured out how to thrive in this new economy yet, but they are making some headway with a focus on experience and the modern consumer’s values and needs.
At the same time, most publishers sadly continue to ignore readers’ needs and the impact the connection economy is having on businesses, at their peril.
It’s time to grow some wings…
Metcalfe’s law states that the power of any network is the square of the number of “trusted” nodes on that network – which in business terms equates to this…the most valuable places on the internet are the places that connect us.
So instead of rushing to be just another node in the network, be the node that adds value by bringing people together in a way that instils trust. Enjoy the privilege of talking to people who will listen to you and exchange ideas to grow. Learn from each other. Stop making average stuff for average people and start making incredible stuff for remarkable people. I know it’s not easy, but the harder it is, the more likely it will add value.
One of the greatest American writers of the 20th century, Kurt Vonnegut said it best, “We have to continually be jumping off cliffs and developing our wings on the way down.”
Sure there are risks, but if failure is not an option, then neither is success.