Tag Archives: digital optimization

Competitive Advantage and Digital Transformation – Optimizing in Travel & Hospitality

In my last post I described a set of analytics projects that drive real competitive advantage in retail and eCommerce. These projects are meant to be the opening of the third and final stage of an analytically driven digital transformation. They are big, complex, important projects that make a real difference to the way the business works.

But I know folks outside retail (and they’re the majority of my client-base) get frustrated because so much of the analytics technology and conversation seems to reflect retail concerns. So in this post, I wanted to describe an alternative set of projects specifically for another industry (I picked Hospitality) and talk a little bit about some of the key analytics flashpoints in different industries. Every business is unique. There is no one right set of projects when you get to this phase of digital transformation, but there are analytics projects that are quite important to almost everyone in a given industry.

Here’s a fairly generic set of projects I’d typically attach to a presentation on digital transformation in hospitality.  You can see that about half the projects are the same as what I recommended for retail.

Digital Transformation Phase III Hospitality

Aggressive personalization is a core part of MOST good digital programs – almost regardless of industry. If you’re in health-care, financial services, retail, travel & hospitality, government or technology, then analytics-driven personalization should be a high priority. It’s actually a lot easier to say where personalization might not be near the top of the list: CPG and maybe manufacturing. In CPG, many web sites are too shallow and lack enough interesting content to make personalization effective. In fact, the Website itself is often pretty unimportant. CPG folks should probably be more worried about their marketing and social media analytics than personalization. Manufacturers might be on the same level, but a lot depends on the type of industry, how many products you have, how many audiences, and how much content. In every case, the more you have (product, audience, content), the more likely it is that personalization should be a strategic priority.

I also included Surprise-based Loyalty. Travel is actually the sector where I first developed these concepts. You can read a somewhat more detailed explanation in an article I recently published in the CIO Outlook for Travel & Hospitality. But there are quite a few reasons why hospitality, in particular, is a great place to build a surprise-based program. First, the hospitality industry has numerous opportunities to deliver surprise-based loyalty at little or no cost. That’s critical. Hospitality also has the requisite data to allow for powerful analytic targeting and has sufficient touches to make the concept powerful and workable. What’s more, most of the rewards programs in hospitality suffer from scale. Sure, a few global giants have the reach to make a traditional loyalty program appealing. But if you’re a boutique or mid-tier chain, your traditional loyalty program will never look particularly attractive. Surprise-based concepts get around all that. With no fixed cost, the ability to target and grow them organically, and real impact on loyalty, they deliver a fundamentally different kind of experience that doesn’t depend on scale and global reach.

My third project is another one that could appear almost everywhere: mobile optimization. For Hospitality, it’s particularly important to create a great mobile on-property experience and build out the mobile experience as the Hub for loyalty. Integration of mobile digital experiences with property systems enables a whole array of real experience difference makers – room selection, automatic upgrading, room bidding, expedited check-in, door control, service requests and, of course, plenty of surprise (and traditional) loyalty opportunities.

Why didn’t this show up in retail? Hey, it could. It might be sixth on my generic list. But many of the retailers I’m working with are struggling to figure out how to make mobile an important part of the experience. With all the beaconing and wifi we’ve seen, most opt-in systems simply don’t get enough adoption to make them worthwhile. I think it’s easier to drive adoption in hospitality. And adoption is critical to driving serious advantage.

When I talk about advanced Revenue Management I’m clearly hovering somewhere on the edge of what might reasonably be considered digital. There are lots of different ways to improve revenue management, but what I have in mind here are two specific types of analysis. The first is using digital view volume to feed demand signals into revenue management. This is a simple but effective technique for taking advantage of your digital data to improve your price planning. I also believe that in the zero-sum game that is room (and flight) planning, there are opportunities to use digital data collection from OTAs to reverse engineer competitor pricing strategies and then optimize your price curve to take advantage of that knowledge.

In retail, I talked about the growing importance of electronic signage and integrated digital experiences and optimizing the measurement of those (largely unmeasured) systems. In Hospitality, I’ve picked something that isn’t quite the same but falls in the same omni-channel category – optimizing the integration of on-property with digital. This cuts in both directions and overlaps with the analytics around mobile (obviously), personalization (obviously), surprise-loyalty (obviously) and revenue management. Revenue Management a little less obviously but most revenue management systems use time-based pricing not customer based pricing – often completely missing differentials in customer value from on-property behavior. Casino’s, of course, are the exception to this.

For resort properties, there are significant opportunities to integrate digital view behavior into on-property drives. But for almost every type of property there are ways to make the on-property experience better. Some of this is ridiculously easy. When I log into my hotel wifi, I almost always get the standard property page. No customization. No personalization. But I’m a heavy consumer of certain types of on-property experiences including some highly-profitable ones like late-night room service dinners. Do I ever get a dinner drive? A special offer? A loyalty treat? Nope. Pretty much never.

I put this digital/on-property integration high on the list mostly because when it comes to hospitality, the on-property experience is THE critical factor. I might love or hate the Website or even the App, but both are just little bumps on the great big behind that is the actual stay. If I can help make the stay experience better with digital, I’ve done something important.

So my top five projects for hospitality are:

  • Personalization
  • Surprise-based Loyalty
  • Digital Additions to Revenue Management
  • Mobile Experience and Loyalty Optimization
  • On-Property digital integration

As with retail, none are easy. Most involve complex integrations AND deep analytics to work well. But they form a powerful and powerfully related nexus of programs that drive real competitive advantage.

Of course, as I’ve tried to make clear, the selection of a top-five is utterly arbitrary. Every business will have its unique strategic priorities, market position, and brand. Those things matter. What’s more, the third phase of an analytics transformation is open-ended. There aren’t just five things. You don’t stop when (if ever) you’ve done these projects.

So it’s natural to ask what are some other commonly important projects that didn’t make the list (and weren’t already captured in the earlier two phases). Here, with some notes about industries, are some more things to chew on:

Digital Acquisition Optimization (Campaign-level): I’ve already covered both a campaign measurement framework and Mix/Attribution in the first two phases. But I haven’t been quite true to myself since I often tell clients to worry about optimizing your individual channels and campaigns first before you worry about attribution. There are more powerful analytic techniques for campaign-specific optimization than attribution – and many, many enterprises would be well-advised focus on those techniques as part of their overall digital transformation. I won’t say that every digital media buy I see sucks. But a lot do. This one isn’t specific to industry; it’s important to anyone dropping significant dime on digital marketing.

Right-Channeling Support:  This analytics project often makes my top-five list in financial services, technology, and health care (but it’s important in a lot of other places too). Not only is the call-center a significant cost for many an enterprise, it’s almost always a significant driver of churn and bad experience. That’s not always because call-centers are bad – it’s hard to do well. And these days, many people (I’m certainly in this bucket) flat out prefer digital servicing in most use-cases. So digital servicing is a big deal and it’s deeply analytic. Bridging digital and call is a huge analytics opportunity and one of the most important projects you can take in a digital transformation.

Digital Sales Support: If a field-sales force is a core part of your business, then digital analytics to support what they do is often in my top-five projects around transformation. Technology, Pharma, and certain areas of Financial Services (like Insurance and Wealth) all need to figure out how their digital assets play with their field sales force. Siloed approaches here are worse than silos in digital marketing attribution. You can NOT do this well unless you tackle it as an integrated effort with consistent measurement across the journey.

Content Attribution: When I was at the Digital Analytics Hub in Europe one of the most interesting parts of the discussion around transformation focused on the need for traditional companies to become, in effect, media companies. There’s nothing terribly original about this idea (not sure who’s it is), but it is terribly important and often it’s a huge stumbling block when it comes to transformation. Companies don’t build nearly enough content to be good at digital and they don’t measure it appropriately. Learning how to measure the content experience and how to take advantage of content are keys to effective digital transformation and anyone focused on building deeper sales cycles should think carefully about making content attribution a prominent part of their initial analytics plan.

Balancing Success:  One of the biggest failure points in digital transformation in my client-base involves situations where a digital property has several very important enterprise functions. Selling and generating leads, advertising and engagement, linear vs. direct consumption, building brands vs. generating revenue. These are all common examples. The problem is that most enterprises are wishy-washy when it comes to balancing these objectives. When I ask senior folks what they really want (or when I look at how people are measured), what I usually hear is both. That’s not helpful. There are analytic approaches to measuring the trade-offs in site real-estate and marketing between driving to multiple types of success. If you haven’t done the analytics work to figure this out and set appropriate incentives and performance measurements, you’re simply not going to be good at all – and perhaps any – of your core functions.

Well, I could go on of course. But I’m almost at four pages now – which I know is excessive. There are a lot of options. That’s why creating a strategic plan for analytics transformation isn’t trivial and it isn’t boilerplate. But as I pointed out in my introduction to the last post, this is the fun stuff.

In my next post, I hope to tackle those organizational issues I’ve been deferring for so long – but I may have one or two more detours up my sleeve!

[BTW – Early bird sign up for the U.S. version of the Digital Analytics Hub is coming up. If you’d like a promo code, just drop me a line!]

Measuring the Digital World

After several months in pre-order purgatory, my book, Measuring the Digital World is now available. If you’re even an occasional reader of this blog, I hope you’ll find the time to read it.

I know that’s no small ask. Reading a professional book is a big investment of time. So is reading Measuring the Digital World worth it?

Well, if you’re invested in digital optimization and analytics, I think it is – and here’s why. We work in a field that is still very immature. It’s grown up, as it were, underneath our feet. And while that kind of organic growth is always the most exciting, it’s also the most unruly. I’m betting that most of us who have spent a few years or more in digital analytics have never really had a chance to reflect on what we do and how we do it. Worse, most of those who are trying to learn the field, have to do so almost entirely by mentored trial-and-error. That’s hard. Having a framework for how and why things work makes the inevitable trial-and-error learning far more productive.

My goal in Measuring the Digital World wasn’t so much to create a how-to book as to define a discipline. I believe digital analytics is a unique field. A field defined by a few key problems that we must solve if we are to do it well. In the book, I wanted to lay out those problems and show how they can be tackled – irrespective of the tools you use or the type of digital property you care about.

At the very heart of digital analytics is a problem of description. Measurement is basic to understanding. We are born with and soon learn to speak and think in terms of measurement categories that apply to the physical world. Dimensionality, weight, speed, direction and color are some of the core measurement categories that we use over and over and over again in understanding the world we live in. These things don’t exist in the digital world.

What replaces them?

Our digital analytics tools provide the eyes and ears into the digital world. But I think we should be very skeptical of the measurement categories they suggest. Having lived through the period when those tools where designed and took their present shape, I’ve seen how flawed were the measurement conceptions that drove their form and function.

It’s not original, but it’s still true to say that our digital analytics tools mostly live at the wrong level and have the wrong set of measurement categories – that they are far too focused on web assets and far too little on web visitors.

But if this is a mere truism, it nevertheless lays the ground work for a real discipline. Because it suggests that the great challenge of digital is how to understand who people are and what they are doing using only their viewing behavior. We have to infer identity and intention from action. Probably 9 out of every 10 pages in Measuring the Digital World are concerned with how to do this.

The things that make it hard are precisely the things that define our discipline. First, to make the connection between action and both identity and intention, we have to find ways to generate meaning based on content consumption. This means understanding at a deep level what content is about – it also means making the implicit assumption that people self-select the things that interest them.

For the most part, that’s true.

But it’s also where things get tricky. Because digital properties don’t contain limitless possibilities and they impose a structure that tries to guide the user to specific actions. This creates a push-pull in every digital world. On the one hand, we’re using what people consume to understand their intention and, at the very same time, we’re constantly forcing their hand and trying to get them to do specific actions! Every digital property – no matter its purpose or design – embodies this push-pull. The result? A complex interplay between self-selection, intention and web design that makes understanding behavior in digital a constant struggle.

That’s the point – and the challenge – of digital analytics. We need to have techniques for moving from behavior to identity and intention. And we need to have techniques that control for the structure of digital properties and the presence or absence of content. These same challenges are played out on Websites, on mobile apps and, now, on omni-channel customer journeys.

This is all ground I’ve walked before, but Measuring the Digital World embodies an orderly and fairly comprehensive approach to describing these challenges and laying out the framework of our discipline. How it works. Why it’s hard. What challenges we still face. It’s all there.

So if you’re an experienced analyst and just want to reflect your intuitions and knowledge against a formal description of digital analytics and how it can be done, this book is for you. I’m pretty sure you’ll find at least a few new ideas and some new clarity around ideas you probably already have.

If you’re relatively new to the field and would like something that is intellectually a little more meaty than the “bag of tips-and-tricks” books that you’ve already read, then this book is for you. You’ll get a deep set of methods and techniques that can be applied to almost any digital property to drive better understanding and optimization. You’ll get a sense, maybe for the first time, of exactly what our discipline is – why it’s hard and why certain kinds of mistakes are ubiquitous and must be carefully guarded against.

And if you’re teaching a bunch of MBA or Business Students about digital analytics and want something that actually describes a discipline, this book is REALLY for you (well…for your students). Your students will get a true appreciation for a cutting edge analytics discipline, they’ll also get a sense of where the most interesting new problems in digital analytics are and what approaches might bear fruit. They’ll get a book that illuminates how the structure of a field – in this case digital – demands specific approaches, creates unique problems, and rewards certain types of analysis. That’s knowledge that cuts deeper than just understanding digital analytics – it goes right to the heart of what analytics is about and how it can work in any business discipline. Finally, I hope that the opportunity to tackle deep and interesting problems illuminated by the book’s framework, excites new analysts and inspires the next generation of digital analysts to go far beyond what we’ve been able to do.

 

Yes, even though I’m an inveterate reader, I know it’s no trivial thing to say “read this book”. After all, despite my copious consumption, I delve much less often into business or technical books. So many seem like fine ten-page articles stretched – I’m tempted to say distorted – into book form. You get their gist in the first five pages and the rest is just filler. That doesn’t make for a great investment of time.

And now that I’ve actually written a book, I can see why that happens. Who really has 250 pages worth of stuff to say? I’m not sure I do…actually I’m pretty sure there’s some filler tucked in there in a spot or two. But I think the ratio is pretty good.

With Measuring the Digital World I tried to do something very ambitious – define a discipline. To create the authoritative view of what digital analytics is, how it works, and why it’s different than any other field of analytics. Not to answer every question, lay out every technique or solve every problem. There are huge swaths of our field not even mentioned in the book. That doesn’t bother me. What we do is far too rich to describe in a single book or even a substantial collection. Digital is, as the title of the book suggests, a whole new world. My goal was not to explore every aspect of measuring that world, but only to show how that measurement, at its heart, must proceed. I’m surely not the right person to judge to what extent I succeeded. I hope you’ll do that.

Here’s the link to Measuring the Digital World on Amazon.

[By the way, if you’d like signed copy of Measuring the Digital World, just let me know. You can buy a copy online and I’ll send you a book-plate. I know it’s a little silly, but I confess to extreme fondness for the few signed books I possess!]