It seems every week I get another solicitation to purchase the newest data collection technology. Each one claims to give the best insight into my business and give me data I have never seen before. Recently I took a look at how much it would cost me to purchase everything that was sent to me, and it exceeded my entire marketing budget for the year. How are hotel sales and marketing strategists supposed to sort through the noise, make decisions about what to buy, what to ignore, and how much to spend to ensure that you are maximizing your efforts?
Determine the business need
The biggest mistake you can make is buying reports and then determining what business need the data addresses. Many of the companies I’ve talked to have “really cool data.” And a data junkie would be hard pressed to turn away from the opportunity to slice and dice and view their business in unique ways. However, that does not mean that we NEED the data, or even that the data is helpful.
The best way to determine whether to consider a new product is to look internally at your business needs. Do not allow a business need to be created for you. Once you determine your business need, seek out the partner companies that can help you bring the necessary data to the table to address the need.
Evaluate your current position
Once you know your business need, review your data and evaluate your current state. This includes looking at your internal reporting capabilities and your external reporting purchases. When looking at what you are able to produce through your own company, look not just at what reports you are already running but also the full catalogue of reports that are possible from the complete suite of tools you are already using (e.g. PMS/CRS, data warehouses, BI tools, etc.). Are there reports or data points you can use that will not require any additional expense? If you are not able to get the information internally, look externally, making sure to first reach out to companies with whom you already work. Many times there are price discounts for multiple products purchased from the same vendor.
Dive deep into the sales process
If you determine that purchasing reporting is the direction you’ll go, be sure to have the vendors you’re considering show you how to use the data they provide. Don’t get caught up in sales presentations that look at a product in a bubble—where the data comes from, what methodology they use to aggregate and package the data points, etc.—but steer the conversation in a very practical direction.
Ask lots of questions to be sure the product you are considering will help you move your company in the direction it needs to go and that you are buying actionable data, not informative data:
•When a sales presentation shows the logos of all the companies with which a vendor is already doing business, ask how those other hotels are using the data and what business need they are solving with it.
•If big brands are listed, ask if there is a corporate deal for all hotels or if there are contracts with one or two franchise hotels.
•For each slide in the data portion of the presentation, ask “What can I do with this information?” If there is not a quick, good answer, that might be an indication this data is cool, but not useful.
•When looking at the product, find out what you are buying. Does a subscription to the reporting bring with it ongoing support or consulting? Are there resources online for user training? Does it cost more for multiple users to access the reporting?
•Be on the lookout for costs outside the contract. Will there be a cost for getting the data to the company if they require your participation in the data collection? Are there interfaces and annual subscriptions to other vendors required? Many of these “hidden” costs quickly add up and are often negotiable.
•Ask what levels of subscription there are. Usually you are presented with the most frequent delivery, the most data points and the highest cost option. If you are able to get the data less frequently and cut out the unimportant data points, you might find savings of up to 50% off the original quoted price. Would a yearlong or longer contract give a pricing discount? What about a discount for buying the product across more than one hotel if you have the ability to leverage a multi-hotel contract?
•Finally, ask for a real sample of data from a real hotel (if the technology allows, that sample should be with your data). Now is your chance to really dig into the product. Once you sign the contract it will be too late to do an in-depth evaluation. Look at all tabs, screens and reports to ensure what you are buying is both actionable and will impact your business need. If it isn’t or won’t, it is OK to walk away. Knowing when not to buy is as important as knowing when to buy.
The once-a-year sales manager
When you look at the reporting you already purchase, do you hear from the sales rep just once a year when it is time to renew? Do you even hear then, or do you just get an invoice? Each renewal presents an opportunity to make your data better.
The first question is to determine if you still need to receive the data at all. If you do end up needing to continue with the product, ask if there have been any new products released or if there are new pricing bundles or other cost saving options. Ask if renewing would bring down the rate for you as a long-term loyal customer. And remember, just because a company was the right partner when you started the relationship, it does not mean they are the right one a year or two down the road. Don’t be afraid to discontinue a relationship that is not meeting your business needs.
It’s okay to not have it all
Revenue managers frequently suffer “data envy.” The latest and greatest data product for a revenue management professional is like the biggest and best lawn mower for suburban home owners. It’s all about the bells and whistles—the horse power. When looking at how to spend your money, make sure there is an ROI. Make sure that you can take action on the data. And most importantly, make sure you are not taking money from other marketing initiatives to cover data for data sake. Don’t get the riding mower for a 500-square-foot backyard.