CRM for hotels: functional, cost and myths

Author: Christina Vier

With popularisation of automation and the demand for personalization of customer data, questions about CRM and PMS systems became essential. Recently, there are 10 times more customers who apply for a CRM system than last year. The PMS system now is a must have.

The hospitality industry isn't an exception. Hoteliers and top management of hotel companies were interested in the data accounting services available on the market, their capabilities and impact on profits.

We invited both parties to the conversation: the representative of the hotel sector, Executive director of the management company Ribas Hotel Group, Ribas Hotels Group Andrey Marenchuk, and CEO of the Expert Solution company, developer of the SERVIO software product, Igor Grechko. 

WHAT IS IT AND HOW CAN WE USE IT?

Despite the fact that talks about accounting programs are endless, for a long time, many entrepreneurs have a somewhat blurred opinion about what an automatic data processing system is. For some of them, CRM is an increase in sales; for others - optimization of marketing costs; for someone - something else. But none of these interpretations are part of CRM.

Andrey Marenchuk:

• CRM from the beginning is an empty platform filled with meanings. It can either bring some kind of result, or become a waste of money.

Igor Grechko:

• It's an usual situation for CRM systems not only to provide functionality that they, in principle, don't possess, but also ascribe to them the capabilities of other tools. For example, the concepts of CRM and PMS systems for a hotel are often very confused.

Photo: Ihor Grechko

It's important to separate them because:

• CRM is a system for maintaining customer relationships,and analyzing the information received.
• PMS is a primary accounting system that deals with operating activities in a hotel: booking, checking in, paying bills, working with fiscal equipment, coding key cards, printing out questionnaires, booking confirmation, check-out operations, and collecting statistics. A separate block is housekeeping, formation of tasks for cleaning, control of implementation, statuses for repairs in the rooms. These are the basic tasks that PMS solves.

In the majority of cases, they complement each other. And perfectly, it's necessary to build a symbiosis of those systems for the most effective work of the sales and marketing department.

MAIN QUESTION

According to both experts, the main question that should be answered before starting the search for a perfect system for yourself is: "Why does your business need a CRM system?"

The answer options “Because everyone has it” or “The competitors have it, so we should have it as well” are categorically inappropriate and are not able to solve the “pains” of hospitality objects.

Photo: Andrey Marenchuk

Andrey Marenchuk: 

• One of my friends doesnt have a car. He has the opportunity to buy it, but for him it is easier, faster and cheaper to catch a taxi to work. All of his colleagues and friends have cars, and they are surprised at his unwillingness to buy a car. And he lives next to the office, in the city center, and does not want to spend time, money and effort looking for a parking space, traffic jams and other things. A car would never have solved his "pain" by means of transportation. But there are often cases when companies acquire CRM, based on advertising promotions of the CRM itself, and not their own needs.

Igor Grechko: 

• It's no longer possible for a hotel to live without a PMS system. It's like one of the wheels of a car, without which the mechanism simply won't run. CRM is helpful mechanism that makes your car much more modern. Without CRM, the hotel functions like a simple classic car. A modern hotel requires a different approach, development, knowledge.

I agree with our partner of Ribas Hotels Group. Before choosing a CRM system, hoteliers need to ask themselves the key question: "Why do I need that"?

If there is no answer to this question, then there will be no sense from the installation of the system. If you just want to maintain a database of contacts, you don't need a full-fledged CRM. If you don't understand what to do with it - how to process requests, communicate with guests, what marketing programs to conduct, what you want to track: how much is spent on advertising or how much time is spent on the arrival of one lead - first understand these issues. Then it will become much easier to decide what to choose.

By purchasing a box of a CRM system, you are not willing to receive answers to all complex questions.

WHO NEEDS A CRM?

Igor Grechko:

• For a small hotel, the basic Bitrix24 will be enough, there you can customize the types and stages of transactions, track these transactions in the sales funnel. For this, you don't need to specially modify the product. And the cloud version of it will be enough.

If the business owner wants to rebuild business processes, clarify them, track the stages of certain transactions, set up additional rules, then you should think about a more elaborate product.

For example, a guest contacted you to find out the price of night. At the same time, I asked about booking for the summer. A month before the beginning of the summer season, the system can analyze all guests who asked for rooms for the summer months. If they didn't find a reservation, but there was a request for this, then, according to the introduced algorithms, the system will send the guest a special offer.  

This is not available in the standard version. And in the format of a system prescribed for a company, as well not provided. Such a functionality cannot be included in your system by simply clicking on the checkmark in the proposal for depth work with data. All this must be thought over and prescribed manually. There can be many tasks like that. To do this, you need a developer who will customize and modify the system for a specific company.

FIRST WAS EXCEL...

Ribas Hotels Group began to implement CRM far from the start. At first, like many others, I used a “dear old” excel table. And many hospitality objects now use it in their work. At a certain stage, everyone was absolutely satisfied with excel. Data was entered into it in order to notice: who was calling, what kind of guest it is, what preferences he has, with whom he was resting, what drinks he drank, what food he ordered to the in-room dining.

As time went, the amount of data increased and it became more difficult to structure it. And the management company thought about how to reduce the processes from manual to automated data collection for further analysis. For example, what if the manager made a 20% conversion? Is this good or bad? So far, this is only data with which it is necessary to work in the future.

WHAT IS THE PROFIT?

As we mentioned above, PMS and CRM systems allow hoteliers to save time, reduce costs, increase profits, while improving guests relations. Let's look closer at how it happens.

• Saving time.
  If a guest came back to the hotel of the chain, but not to the one from the previous time, then the receptionist or the booking manager doesn't need to enter the data into the system for a second time. He can pay additional attention to the guest, and save time, because information about him is already in the system and he doesn't have to answer a number of questions, fill out a questionnaire, or sign papers.

• Detailed statistics.
  Information about arrivals, departures, average rate, profitability allows employees to pay more attention to the guest.

• Mailings and personalization.
  Analytics in the system allows you to record how often a guest visits the hotel, what he likes, what he is interested in. Therefore, you can send him a certificate, a notice about service or a promotional code with a discount for a service he might like. And do it without spending a lot of time and effort.
  Although you can, do it in an old fashioned way - take a magazine and call your guests. As a result, get a significant waste of time and a high cost per lead.

Andrey Marenchuk: 

• Initially for RHG, the task was - to see guests who move from one hotel to another facility, and to understand what services they consume.

After staying at the Wall Street hotel for a certain time, the guest checked out. Receptionist completes his CRM profile in the same way as YouTube could complement the user's preferences. That is, Mr. X was once in one of the hotels, and the management company already knows that he loves Jameson whiskey, Pringles chips, that he had requests for washing, ironing, he asked to change the pillow; or for example, guest is asthmatic, that the air was too dry for him, which means that you need to adjust the equipment to a more humid mode.

In the future, the set of this data makes it possible to modify the service product in another hotel, which Mr. X will visit. When he checks into the Ribas Karpaty hotel, the receptionist will see all the data about him and arrange a much more personalized service: he will put Jameson in the bar, add more Pringles packages , and humidifies the air in the room.

The task of hoteliers is to collect data using CRM and start using it when designing a hotel. For example, Ribas Karpaty has provided a huge pillow menu: for pregnant women, for allergy sufferers, orthopedic, mint-scented pillows and many other options.

Thus, the company, in modern terms, digitizes guests in order to provide a more personalized service for each guest. We cannot treat a guest who visits us for the fifth time as a new guest, because he already perceives us as a second or third home.

In addition, we use the CRM system not only in guest relations. It is actively used within the company, between employees of different departments and hospitality facilities.

CRM myths: Confirmed or Disproved?

We have collected the most common myths about CRM and asked experts to comment on them.

• CRM is expensive

Andrey Marenchuk: 

• No, it's not expensive if it's the standard version. Yes, the processes will not be adapted to the company: they cannot be modified to suit your preferences. As it is fashionable to say now, it will not be possible to be personalized.

It's like a typical simple Soviet flat - a nice apartment that fulfills its intended purpose: it provides shelter, warmth, and lodging for the night. But if you want to customize: expanding the area, changing the renovation is expensive.

Ribas Hotels Group Bitrix cost 280 thousand UAH. The European Bank of Reconstruction and Development helped in the purchase of the company.

Igor Grechko: 

• Basic boxed CRM is cheap. There is a free version: “Bitrix24” with up to 10 users. Up to 50 gigabytes for several years - is for free. Therefore, we can say that the cost of CRM ranges from 0 to infinity of the customer's wishes.

• CRM is complicated

Andrey Marenchuk: 

• It is difficult, first of all, because there is resistance from the team. At the beginning, the team, of course, will say: "Cool!" ... And in a week, employees would like to gradually return to what they are used to, and a bunch of objections such as “this is inconvenient, it is impractical, it is more convenient in the messenger, it is more convenient in the tablet”. We are people of habits, we are used to working the same way as on the first day when we came to work. When any changes take place in the office, even changing your workplace, it leads to a certain level of stress.

If you are willing to resist any objection that is bound to arise, then you will get a positive result.

Igor Grechko:

• CRM is more complicated than messenger or excel. But this is justified, since the system allows you to save and accumulate data with further analytics. You can easily transfer information from one manager to another.

• CRM in the company increases the risk of data theft

Andrey Marenchuk: 

• If you enter CRM, then the staff will not be able to download your customer base. It's impossible to download data from there. In manual mode, of course, you can carry it, phone to phone, but it takes a lot of time and effort. Thus, unscrupulous employees will not be able to leave the company, taking their data with them. But you can download the excel table at any time.

Therefore, if we talk about the risk of information leakage from staff, then CRM is the best solution for security.

The CRM-system of a Ribas Hotels Group is located on a server located in Germany. It is reliably protected, it is impossible to get into this base. Everything that is stored there is property registered to the company. Nobody has access to this data, except us.

If you prefer to store data on the cloud, understand that it is susceptible to DoS attacks.

Igor Grechko: 

• Any information can be stolen if no action is taken to prevent it. It's technically impossible to pick up a database from a CRM. You can, of course, take screenshots of the screen or take pictures of the computer screen and then manually enter this data somewhere.

CRM-system stores all information in an internal database, to which access is not given in its pure form and in full.

Access rights can be shared. Thus, one manager doesn't see the contacts for which another employee works; you can also block access to other deals.