BY ALEX NORMAND
This article is the first in a three-part Two Circles report titled ‘What You Need to Build a Thriving Hospitality Business’. To download the full report, click here: Two Circles Thriving Hospitality Business
How well major sports rights-owners can understand and analyse data around their target buyers can be the difference between success and failure when forging a hospitality strategy.
When looking to sell out available inventory, maximise revenues and offer the best possible experience for customers, the blanket approach no longer works. Customer data – specifically information on demographics, behaviours and attitudes – provides the ‘who’, ‘what’ and the ‘why’ behind a successful hospitality strategy.
UNDERSTANDING YOUR CUSTOMERS
Your client mix is the first place to start – being able to identify and separate individuals from corporate accounts will quickly highlight the dynamics of your customer base, and the extent to which it has changed over a given period of time. Individuals may be in a financial position to afford and consider hospitality now for the first time – and the customer data will show you.
For an effective strategy, demographics must be more than just age and sex – data should be enriched using tools that, for instance, use an individual’s postcode to understand the socio-economic influences on their lifestyle.
Similarly, rich and readily-available business data can help quickly identify the size and growth potential of client leads, and help you better understand the nature of the market you’re operating in.
The insight that can be derived from behavioural data is of significant value when looking to grow your hospitality business. Hospitality is an 80:20 business – generally speaking the vast majority of revenue will come from a small proportion of clients – and that is important to bear in mind when identifying the clients that contribute most to the bottom line.
Just imagine knowing the types of catering options higher-spending clients purchase most regularly, what time they respond to phone calls and last came online, whether they’ve sold their seat for the last five events or whether the next one will be their very first. Using this intelligence to respond to current and potential clients’ needs and preferences and rewarding them accordingly could be the difference between success and a stagnant hospitality offering; at Two Circles we’ve seen hospitality businesses with levels of client churn in excess of 60%, and sales teams that weren’t even aware of that being a problem.
Hospitality clients will invariably have different motivations and objectives for entering into a ‘premium’ relationship with a sports organisation. Understanding these attitudes within both the context of your business and the wider market is crucial in understanding how your hospitality offering makes you different to the competition.
A data-driven approach gives a solid base to build a hospitality strategy, and key intelligence to plan resources – for example, whether agents are needed to service customers, or if it can all be done in-house; how to respond to different leads, and what products need to be created and at what pricing tiers.
Once this structure is put in place, a rights-owner needs to split focus between new business and retention. Across the sports industry the latter is hugely undervalued when building a marketing strategy, and there are too many examples of hospitality businesses that engineer teams and processes around acquisition, only confronting retention when it comes to renewal periods.
The best hospitality businesses are those that have a strong understanding of their customers’ behavioural, attitudinal and demographic profiles. Contact and contract details will only allow you to manage and administer your hospitality business – accessing the right data will enable you to create, build and retain strong relationships with your clients and grow it.
And though you won’t be able to shake every new client’s hand when they renew or exhibit positive behaviour, technology allows you to remind customers that you care – at the right time, and in the right way.
Read the next article in the series.
Download the full report here