Technology has and will continue to transform nearly every aspect of our personal and professional lives. Companies that are keeping up, or better yet, advancing technology are setting the stage for customers' expectations of tomorrow. As for the others… well, be prepared for capitulation to irrelevance or death. In Good to Great author Jim Collins compares organizations enjoying success utilizing a flywheel versus those stumbling their way to oblivion. These organizations are characterized as consistent, disciplined, motivated, and results oriented. The inverse of the flywheel is called the doom loop. Given the constant march of enterprise feedback management (EFM) systems into what has been marketing research's bellwether, I wonder if 1) this same cycle could be applied to one of the more vital research program in hotels today — customer experience — and 2) if technology was the fuel to jettison the vendors that once dominated this space.
There was a time when customer experience measurement (CXM) was founded in marketing sciences and had reliable technology. Now, the tables are turned. Instead of having marketing sciences and data analytics at its core, CXM is completely technology-driven. The same quality measures are in place, but new needs compel us to focus on the technology. And, if your CXM program isn't keeping up with technology, your program is viewed as falling behind.
What isn't being explored often enough, however, is how — or if — we're measuring success. If so, how do we even know we are measuring the right things? What resources are we using to understand and use all this to inform strategy? Big data is constant topic, but solutions are elusive.
So, how did technology become the core of customer experience?
A lot has changed in CXM over the last two decades. Most of it is for the better — but not all of it. Hospitality research and the consumers of this data are fundamentally different. Customer satisfaction and loyalty tracking studies producing relatively stable findings are now viewed as boring. Technology has prompted brand managers and operation leaders to seek new insights not performance metrics.
The role of CXM has also changed. It is no longer about brand performance, the pursuit of consistency, or even continuous improvement for RevPAR. Instead, we want information we didn't have yesterday and that will make us better tomorrow. Which is why market research firms, especially those specializing in customer experience, have been cast as antiquated. Their robust marketing sciences teams/PhDs have been outmatched by enterprise feedback management (EFM) systems that offer sleeker more engaging technology.
Traditional marketing research firms now find themselves on the outside and inconsequential. If technology itself was not the culprit, what was? Success, especially great success, meant some firms were blind to the advances being made in technology and how these reporting tools would ultimately be more valued in organizations than the science of good quality marketing research.
Warning bells were issued early on by a few internal stakeholders and the more forward-thinking clients. Some of these fell on deaf ears. Eventually, marketing research providers began to make bigger investments in internal resources believing homegrown solutions would close the gap. Yet, trying to be the best at something in which you lack expertise was money not well spent. After millions of dollars and years of effort, the landscape changed fundamentally and permanently. Few marketing research firms have been able to create technology tools to support their client base, and others who never quite got it right are finally forging partnerships with their technology brethren. Some still wait, and they will watch their long-time contracts dwindle as hospitality clients search for better alternatives.
Text analytics was the next major tech trend to disrupt traditional CXM programs in hospitality. New players swept in promising to mine, read and analyze all the unstructured text coming in from the traditional customer experience surveys at a fraction of the costs. Major marketing research players' margins reduced, and client's insight teams' dependence began to shift. To stay relevant, alliances were formed and/or forced within hospitality. Turning this activity over to text analytics tools instead of their marketing research providers brought greater efficiency, but few hospitality companies were able to make this information actionable. This failure caused internal stakeholders to scrutinize the price to value of their CXM spend.
Social media and its dazzling rise in hospitality put traditional marketing research firms even further behind. Knowing hotel brands needed to harness this information to minimize risk, traditional marketing firms pursued acquisitions early. But the landscape was too new for them to truly vet the growing array of startups. Social media monitoring in the hospitality arena is now beginning to solidify, and the players currently dominating the space weren't even in existence back when traditional marketing research firms jumped on this movement. The M&A activity for the big marketing research firms isn't living up to its promise.
While social media monitoring has become mainstream, the big lodging brands are deploying one of the 3-4 enterprise offerings that can capture and report location-specific data. And, marketing research firms are left with technology that sits outside their in-house offerings. It cannot be integrated easily and/or was not fully baked to begin with. A lot of hoopla in marketing research with no results or new hospitality clients to show for it.
What is the new frontier for CXM?
Hoteliers have always been on the quest for integration. Marketing research providers opened the door to EFMs with hard coded, difficult to navigate reporting sites. Marrying multiple data sources adds greater complexity. As such, the mantra today is "convenience not science."
Take WynReview as an example. Announced in April 2012 to "help property owners and managers better understand and measure the social feedback that exists about their properties and enable them to benchmark their hotels against their competitors," it is one of the most creative approaches to marrying customer experience and social media.
The surprising thing? WynReview was not enabled through an EFM. Technology, and creative applications of it by a social media solution and the largest review site in the world, allowed a formidable competitor to enter where no threat was previously seen. I doubt TripAdvisor wants to be in the business of surveying, but it gives credence to the notion that firms conducting CXM in hospitality will look very different from traditional marketing research companies of yesterday or even the EFMs of today. As the battle for customer experience measurement dollars rages on, the question becomes: Who will be left standing? Is it possible EFMs will one day find themselves blindsided by other technology players?
While the onus is on brands to be watchful of new technology players who can serve emerging needs, ensuring your vendor is keeping up with technology is a near impossible task. Good CXM is fundamental to our industry. We must continually pursue technology not for the eradication of problems, but to take a collective, proactive approach to building brands and experiences customer truly love.
About the author
Janet Gerhard is the founder of Hospitality Gal, LLC which helps companies generate new and repeat business as well as create strategic partnerships to add considerable value and growth to the bottom-line. Most recently, Janet led the Hospitality sector of newBrandAnalytics, a leading provider of social market intelligence tools. Prior, she spent almost a decade with Maritz and several years in quality assurance with LRA Worldwide. She holds a BS in Hotel Administration from Cornell University and has a passion for customer experience design and measurement. Janet can be reached directly at janet@hospitality-gal.com or @Hospitality_Gal.
