HSMAI Rising Leader Insight: Rethinking Customer Segmentation

Emma Scher, Personalize.AI Customer Success Lead, ZS, HSMAI Revenue Optimization Rising Leader Council Member

There are a variety of ways to segment customers, but the most common method is to look at business, transient, group, and package or discount travelers. However, this approach doesn’t take full advantage of the data about the customer that is readily available, and as a result, it can be quite limiting. Additionally, this method doesn’t consider the different channels that customers book through, preferences for products or the customer’s elasticity. The HSMAI Rising Leader Council discussed moving beyond traditional customer segmentations.

Top 4 Tips:

  • Use data to move towards bottom-up segmentation rather than the current top down.
  • There are many applications for segmentation:
    1. Forecasting
    2. Benchmarking against competition
    3. Targeted marketing
    4. Product recommendations
  • Ensure insights and data is actionable at the hotel level; prioritize analysis that can lead to specific changes.
  • Create agility in the data to adjust the level of granularity based on the application.

Go Deeper

Hotels can no longer afford to segment their customers in the old way. They must be agile and adapt to the changing landscape to stay ahead of the competition.

The data that is collected on customers is extremely valuable, but it isn’t useful if it isn’t actionable. Using a few segments can make management and actioning easier, however can lead to loss of visibility into some trends. Therefore, consider analyzing trends and booking patterns more granularly by source or rate code to understand trends that don’t fall within traditional segment bounds. The more you can learn about customer behavior, the more effectively you can market to them!

It is also important to create agility in reporting to allow for users to change the level of granularity depending on the application. This will allow users to respond to changes in the market quickly and efficiently while scaling the story to an appropriate level.

Categories: Revenue Management
Insight Type: Articles