Factors to Consider Before Purchasing a Customer Data Platform (CDP) for Your Hotel

Maximizing the Benefits of a CDP in the Hospitality Industry

Maximizing the Benefits of a CDP in the Hospitality Industry
Article by
Bram Haenraets
Article update
November 8, 2023
Table of Contents

The hospitality industry has always been about creating memorable experiences for guests. With the rise of technology and the increasing expectations of travelers, hotels must find new ways to personalize guest experiences, increase operational efficiency, and drive revenue growth. One tool that can help hotels achieve these goals is a Customer Data Platform (CDP). A CDP is a central database that collects, integrates, and analyzes customer data from multiple touchpoints. In this article, we will explore the benefits of a CDP for hotels and provide a comprehensive overview of what to consider before purchasing a CDP. By the end of this article, you will have a clear understanding of how a CDP can help hotels achieve their goals and know what to look out for before purchasing a CDP.

What is a Customer Data Platform?

In simple terms, a CDP is like a central database for customer information, allowing restaurants to better understand and serve their customers.

A CDP, or Customer Data Platform, is a tool that helps hospitality businesses collect and manage information about their customers. This information can include things like contact information, dining preferences, and purchase history. The goal of a restaurant CDP is to help restaurants understand their customers better and provide them with personalized experiences.

For example, a restaurant CDP might keep track of a customer's favorite dishes, so the next time they visit the restaurant, the staff can suggest those dishes to them. A restaurant CDP can also help a restaurant create targeted marketing campaigns, like sending special offers to customers based on their dining preferences.

In the old days, hotels relied on basic customer relationship management (CRM) systems to store guest information, such as contact details and booking history. However, these systems were limited in their ability to provide a complete view of each guest, as they often only captured data from a single touchpoint, such as a reservation system.

As technology advanced, hotels began to adopt more sophisticated CDPs, which allowed them to gather data from multiple sources, such as website analytics, social media, and point-of-sale systems. This provided a more comprehensive view of each guest, allowing hotels to better understand their behavior, preferences, and interests.

Today, hotel CDPs continue to evolve and incorporate new technologies, such as artificial intelligence and machine learning, to provide even more insights into guest behavior and preferences. This information can be used to create even more personalized experiences for guests, such as personalized offers, recommendations, and communication.

Over the years, hotel CDPs have developed from basic CRM systems to sophisticated tools that allow hotels to gather and analyze data from multiple sources to provide a more comprehensive view of each guest, leading to more personalized experiences and improved customer engagement.

What problems does a CDP solve for hotels?

Hotels face a number of challenges when it comes to managing customer data and providing a personalized experience for guests. Before the widespread adoption of CDP's, hotels typically relied on a variety of manual processes and standalone systems to manage customer data and provide a personalized experience for guests. Here are some of the problems that a hotel CDP  can now help solve:

  • Data Silos: Without a centralized platform, customer data can be spread across multiple systems and departments, making it difficult to get a complete view of each guest. A CDP can help bring all of this information together in one place, providing a single source of truth.
  • Incomplete Customer Profiles: With data spread across multiple systems, it can be difficult to build a comprehensive profile of each guest. A CDP can help fill in the gaps, providing a more complete picture of each guest's behavior and preferences.
  • Lack of Personalization: Without a comprehensive view of each guest, it can be difficult to provide personalized experiences. A CDP can help hotels use guest data to create personalized offers, recommendations, and communication.
  • Inefficient Marketing: Without a centralized database of customer information, hotels may struggle to create targeted marketing campaigns. A CDP can help hotels use guest data to segment their customer base and create more effective and efficient marketing campaigns.
  • Poor Customer Engagement: Hotels may struggle to engage with guests in a meaningful way if they don't have a complete picture of their behavior and preferences. A CDP can help hotels use guest data to create more personalized and effective communication, improving customer engagement.

What does a CDP concretely do for a hotel in terms of sales revenue?

A CDP can have a significant impact on sales and revenue for a hotel. By collecting and analyzing data from various touchpoints in the customer journey, a CDP can provide valuable insights into customer behavior and preferences. This information can then be used to inform marketing and sales strategies, such as targeted promotions and upsell opportunities.

Additionally, a CDP can help hotels personalize the customer experience, which can lead to increased customer loyalty and repeat business. For example, a CDP can use data on guest preferences to recommend personalized services or upgrades during the booking process. This can lead to higher average transaction values and increased revenue.

Furthermore, a CDP can help hotels improve operational efficiency, leading to cost savings and increased revenue. For example, a CDP can analyze data on guest behavior to optimize staffing levels and reduce labor costs. It can also provide real-time insights into guest needs and preferences, allowing staff to respond quickly to changing demands and improve guest satisfaction.

Where does a CDP get guest data?

A CDP collects data from a variety of sources. This data can come from multiple touchpoints in the customer journey, such as website interactions, social media, email, mobile apps, customer service interactions, and point-of-sale systems. The data collected can include demographic information, purchase history, online behavior, preferences, and feedback. Additionally, third-party data providers can provide additional data to enhance the customer profile. The data collected is then organized and stored in a centralized database, allowing the CDP to build a comprehensive view of each customer and their interactions with the hotel. This data is used to drive personalization, improve customer experiences, and inform business decisions.

A CDP can potentially use sensors as a source of data, but it is not a requirement. Sensors can be used to collect data on customer interactions with physical environments, such as a hotel room or lobby. For example, sensors can track guest movements and usage patterns in a hotel room, providing insights into guest preferences and behavior. This data can then be used to personalize the guest experience, such as adjusting room temperature or lighting based on the guest's preferences. However, not all CDPs use sensors. Some CDPs rely on data collected from other sources, such as website interactions, social media, email, mobile apps, customer service interactions, and point-of-sale systems. The key is to collect data from multiple sources to build a comprehensive view of each customer and their interactions with the hotel. The CDP then uses this data to drive personalization and improve customer experiences.

How a CDP can be used to enable staff

By collecting, integrating, and analyzing customer data, a CDP provides a comprehensive view of each customer, including their preferences, behaviors, and past interactions with the hotel. This information can be used by hotel staff to deliver more personalized and relevant experiences to guests. A CDP can be used to enable hotel staff in several ways:

  • Improved Customer Understanding: By collecting, integrating, and analyzing customer data, a CDP provides a comprehensive view of each customer, including their preferences, behaviors, and past interactions with the hotel. This information can be used by hotel staff to better understand the needs and preferences of each guest, enabling them to deliver more personalized and relevant experiences.
  • Real-time Information Access: A CDP provides staff with real-time access to customer information, allowing them to respond quickly to changes and adapt their approach as needed. This can help to improve the guest experience and build trust and loyalty with guests.
  • Personalized Communications: By using customer data, staff can personalize communications with guests, including emails, SMS messages, and in-app notifications. For example, if a guest has previously expressed a preference for a certain type of room or a specific brand of toiletries, staff can use this information to send relevant communications and offers.
  • Improved Operations: By providing real-time insights into customer behavior, a CDP can help hotel staff identify opportunities to improve operations and resolve issues more quickly. For example, if a guest is booking rooms more frequently or spending more money than usual, staff can take this information into account and make relevant recommendations to improve the guest experience.
  • Increased Productivity: By automating repetitive tasks and streamlining processes, a CDP can help hotel staff be more productive and focus on delivering a better guest experience. For example, staff can use a CDP to quickly retrieve customer information and personalize communications, freeing up time to focus on other tasks.

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Wearable technology has revolutionized the way businesses operate, and the hospitality industry is no exception. With wearables such as smartwatches, hotels can equip their staff with powerful tools that can help improve guest experiences and increase efficiency. By combining wearables with a CDP, hotels can leverage the benefits of both technologies to enhance guest satisfaction and loyalty. Wearables with smart task allocation can aid a CDP for hotels in several ways:

  • Improved Task Management: Wearables can help hotel staff manage tasks more efficiently by providing real-time updates and notifications. Staff can receive notifications about new bookings, room requests, and other tasks, allowing them to respond more quickly and improve their productivity.
  • Real-time Communication: Wearables can provide staff with real-time communication with guests and other staff members. This can help to improve the guest experience and resolve issues more quickly. For example, if a guest has a request or needs assistance, staff can receive the request and respond in real-time.
  • Enhanced Guest Interactions: Wearables can help staff provide a more personalized and relevant experience to guests by providing them with real-time information about guest preferences, behavior, and past interactions with the hotel. This information can be gathered from the CDP and used to prepare rooms and provide a more customized experience for guests.
  • Increased Collaboration: Wearables can help staff collaborate more effectively by allowing them to quickly share information and communicate with each other. This can help to improve the guest experience and resolve issues more quickly.

Overall, wearables with smart task allocation can complement a CDP by providing staff with real-time information, improved task management, enhanced guest interactions, and increased collaboration. The CDP can provide a centralized view of customer data and insights, allowing staff to deliver a more personalized and relevant experience to guests, enhancing guest satisfaction and loyalty.

The limitations of a CDP

While a CDP can help hotels solve many challenges related to managing customer data and providing personalized experiences, there are still some challenges that remain. Here are a few examples:

  • Data Privacy: With the increasing focus on data privacy and security, hotels may struggle to ensure that they are collecting, storing, and using customer data in a responsible and compliant manner. A CDP can help with data management, but the hotel is still responsible for ensuring that they are adhering to all relevant privacy regulations.
  • Integration with Other Systems: Integrating a CDP with other systems and data sources can be a complex and time-consuming process, especially for hotels that use a variety of legacy systems. Ensuring that all relevant data is being captured and accurately reflected in the CDP can be a challenge.
  • Data Quality: Ensuring that the data collected by a CDP is accurate and up-to-date can be a challenge, especially as customer data can change frequently. Hotels need to have robust processes in place to ensure that the data in their CDP is reliable and up-to-date.
  • Customer Acquisition: While a CDP can help hotels better understand and engage with their existing customers, it does not necessarily help with acquiring new customers. Hotels still need to invest in customer acquisition and marketing efforts to attract new guests.
  • Unactionable data: While a CDP can help hotels provide more personalized experiences for guests, it is not a guarantee that the customer experience will be positive. Hotels still need to invest in improving their operations, service quality, and overall customer experience to ensure that guests have a positive experience. For example, even if a hotel has a detailed profile of a guest's preferences, if the room is not clean or the staff is unprofessional, the guest's overall experience will likely still be negative. On the other hand, if the hotel has a well-trained staff, a clean and comfortable room, and a CDP that provides personalized experiences, the guest is more likely to have a positive experience.

The 7 factors to consider before purchasing a CDP

Before purchasing a CDP for your hotel, it's important to consider the following factors:

  1. Integration: Ensure that the CDP you choose can easily integrate with your existing systems and platforms, such as your website, booking engine, and point-of-sale system. This will ensure that the CDP can collect data from all relevant touchpoints in the customer journey.
  2. Data Privacy: Make sure that the CDP you choose complies with all relevant data privacy regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
  3. Security: Data security is critical when it comes to storing sensitive customer information. Make sure that the CDP you choose has robust security measures in place, such as encryption, access controls, and regular security audits.
  4. User-friendliness: Ensure that the CDP you choose is easy to use and understand, with a user-friendly interface that allows staff to access the data they need easily and quickly.
  5. Cost: Consider the total cost of ownership when evaluating CDPs, including the cost of the platform, any required integrations, and ongoing maintenance and support.
  6. Technical Support: Ensure that the CDP you choose comes with comprehensive technical support, including training and ongoing maintenance, to help you get the most out of the platform.
  7. Customer Success Team: Look for a CDP provider with a dedicated customer success team who can help you get the most out of the platform and achieve your business goals.

By considering these factors, you can ensure that you choose the right CDP for your hotel, one that will help you drive sales, improve customer experiences, and enhance operational efficiency.

Concluding

hotels looking to improve their sales, revenue, and customer experiences. By collecting, integrating, and analyzing customer data from multiple touchpoints, a CDP can provide valuable insights into customer behavior, preferences, and feedback. When used effectively, a CDP can help hotels personalize guest experiences, increase operational efficiency, and drive revenue growth. Before purchasing a CDP, it's important to consider factors such as integration, data privacy, security, user-friendliness, cost, technical support, and customer success. By doing so, you can ensure that you choose the right CDP for your hotel, one that will help you achieve your business goals and drive long-term success.

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