Segmenting your database is crucial to improving your guests' stay and satisfaction, the performance of your marketing strategy, and ultimately your profitability.
What is segmentation?
Segmentation is when you group contacts with similarities (nationality, language, age, gender, city of residence, etc.) from a list of contacts. The objective is to target these groups with similar interests and expectations with messages that can be personalised with dedicated offers, relevant information, etc.
These groups are referred to as "segments". And to create them, the contacts are filtered according to criteria based on the data retrieved by your CRM on each guest.
Here are a few examples of segmentation criteria, which can be based on socio-demographic criteria (age, nationality, language, etc.), geographic criteria (city of residence, continent, postal code, etc.), or activity/behaviour criteria (opening a campaign, number of stays, duration, recurrence, etc.):
Segment 1 - All your English-speaking guests :Guest nationality / Is / English, (or) American, (or) Australian, (or) Canadian, ETC.
Segment 2 - All your guests in Yorkshire: Postal code of residence / Begins with / YO, TS, DL, LA, BD, HG, DN, WF
Segment 3 - All your "Family" guests : Child / Older than or same age as / 1
You can (and should) combine as many criteria as you like to create finer segments:
Segment 3 - All your young couple guests near London:
- Postal code of residence / Starts with / E, EC, N, NW, SE, SW, W, WC
- Age / Less than / 40
- Children / Equal to / 0
Segmenting your contact base means "slicing" your guest list into guest types or marketing personas. If the segmentation is executed well and is coupled with relevant messages for each segment, there are many benefits: increase in the opening of and responses to your email, SMS and WhatsApp campaigns, increase in additional sales, increase in guest satisfaction and retention, etc.
Why do we need to segment?
With the mass of emails and messages received every day, it is imperative for an establishment to stand out from the crowd to maximise its marketing initiatives and ensure that the messages get through to guests.
Segmentation = Personalisation
All your guests are different and have different needs and expectations. Their motivations and preferences are unique and, to ensure an optimal experience, you must give them the opportunity to communicate these and respond to them.
Segmenting allows you to send the right message to the right person at the right time. A generic message will not be read, understood or even viewed favourably, because the recipient will most likely be annoyed by it.
Setting up a segmentation on your base requires you to take the time to identify the different types of guests you have, how to identify them, and to think about the messages and offers you want to send them . Setting up the segments and campaigns will take some time but it will save you infinitely more time and increase the profitability of all your loyalty actions.
The benefits of segmentation
More fluid guest communication
The more relevant (rather than generic) your messages are, the more your guests will pay attention to what you send them. Operational teams will be less preoccupied with low-value-added requests, and will have more time to build deeper exchanges with guests. Your guest relations will be all the stronger for it.
Increased guest satisfaction
Guest satisfaction is linked to the emotions and feelings experienced during the stay. The quality of the guest relationship is therefore a major factor to consider.
That's why segmenting is so important, as it enables you to address homogeneous groups of individuals with roughly the same tastes, resources and behaviors. By providing them with the advice and information they need, you can increase their satisfaction by meeting their needs and making them feel cared for, without having to ask them.
More efficient marketing campaigns
For your campaigns to be read and opened, the message must interest the recipient, and to do this, it must be relevant. The more personalised the messages that you send are, the more engaged your guests will be and therefore more inclined to open, click and subscribe to your offers.
The more your e-mails are opened, the better your delivery rate will be for the next campaigns that you send. Indeed, the less relevant your e-mails are, the higher your unsubscription rate will be, which directly impacts the delivery rate of your next mailings.
Sales objectives are more easily achieved when the right target is reached. The personalised offers you send out will therefore have a better conversion rate. It's also a good idea to segment and target your "premium" guests, who may accept a higher price, but to whom you can offer other advantages (express check-in, preview opening, choice of room, personalised welcome, etc.).
Increased guest loyalty
A more attentive guest relationship is more valued by the guest and helps builds a lasting bond between you and your guests. With content that speaks personally to each guest, your brand image is all the stronger for it. As your guests have more confidence in your establishment, they are more likely to recommend you, talk about you, leave online reviews and revisit your establishment.
Know your guests better
By segmenting your guest base, you can assess and analyse the types of guests who visit your establishment: their habits, preferences and expectations. By enriching your guest knowledge, you're in a better position to make sensible decisions that benefit both you and your guests.
Some examples of segmentation in the hotel industry
Transactional campaigns concern all your mailings related to a stay: e-mails, SMS and WhatsApp messages sent prior to the guests' arrival, during their stay or post-stay and linked to their reservation are all examples of transactional campaigns.
By segmenting these campaigns, you can improve the guest experience by providing clear, relevant information: information on the stay, confirmation, services offered, recommendations, satisfaction surveys, etc.
Segmenting your guests allows you to group together guests who share a particular feature, such as a particular service ordered, a particular price code, a particular number of stays, and so on.
These guest lists can help you with internal operational tasks:
The list of VIP guests arriving the next day allows you to prepare welcome kits
The list of guests who have opted not to have their bedding and towels changed (opting-out of daily room cleaning) provides housekeeping staff with a list of rooms not to be cleaned.
The list of guests who have ordered a bouquet of roses enables the teams to know which rooms to put the bouquets in...
Newsletters or marketing e-mails
Segmentation enables you to adapt the type of offer to each marketing persona. By identifying your personas, you can better target your buyer personas (your ideal target guest). Your most loyal guests aren't necessarily the ones to whom you should be sending your best offers (see our article on the marriage of CRM and RMS).
To ensure that your offers are effective, you need to segment your mailings. Not all your guests are interested in the same offers, and providing them with unsuitable offers could contribute to a sharp rise in your unsubscribe rate, or even worse, an increase in spam complaints (which directly impacts your delivery score).
Testing your offer
Segmenting your contact base can enable you to test new strategies on a select group of guests. You can even play on the "privileged" / "private sales" aspect of the offers you send them. Segmentation can thus help your sales teams to define your buyer personas, to test favorable sales periods, to test packaged offers on certain segments, or to develop new segments.
The basic segments to use
Your regular guests
The regular guest category can be divided into two segments:
Guests who have revisited the establishment once: repeat guests
Guests who have stayed with you more than twice: regulars
You can also establish levels of regular guests, either by repetition (level 1: more than 2 times, level 2: more than 3 times, etc.) or by frequency (level 1: more than 2 times a year, level 2: more than twice in 6 months level 3: more than 2 times a month, etc.).
We can also distinguish between those who visited a number of your establishments and those who revisited the same one each time.
Your indirect guests
This segment of guests come from OTAs and need to be enticed with offers to get them to revisit and book through you directly.
Your foreign guests / Your local guests
Your local (or even ultra-local) guests will be receptive to last-minute or weekend offers. You can target them on the basis of the distance between their home and your establishment, or the accessibility of your hotel (cities close by by train or neighbouring towns).
Your leisure guests
In this category, you can define which guests have come as a couple (0 children) and which have come as a family (at least 1 child).
Your business guests
You can take this segmentation a step further by collecting information such as the reason for their stay (trade show / conference, business meeting, guest visit, flexible office, etc.) to tailor the recurrence and type of offer. For example, for an annual trade show, you can program an offer a few weeks before the show date, so that your guest can easily re-book with you.
All the above segments are fully compatible and can be combined to create unique offers:
- Local guests + leisure guests + couples
- Corporate + Overseas guests
Segmentation is essential if you want to ensure that your guests have a smooth and tailor-made experience. It allows you to accompany your guests throughout their stay, to stay relevant so as to never annoy them, and to entice them to revisit. Segmentation also enables you to deepen your knowledge of your guests in order to be better able to make decisions and adapt your services on offer or even your organisation.
Upsell(ing) in the hotel industry is the addition of services (also known as "extras") to a stay, thereby increasing its value guest. Upgrading is an example of upselling in the hotel and airline industries. Upselling makes it possible to capitalize on every guest acquired.
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