Make analytics pay off for you and your customers

The Four Points by Sheraton in Halifax, Nova Scotia, had an ongoing challenge typical to most hotels: putting guests in the rooms with the amenities they desire most.

Staffers would try to find rooms that fulfilled guests' requests, but it was a cumbersome task and many customers didn't get what they asked for. That's because guest preferences, even preferences from people enrolled in Sheraton's corporate loyalty program, were recorded in free text. Plus, the company had no central database for all of its hotels that listed features for each room, such as size, views or bed type.

Executives at parent company Starwood Hotels & Resorts Worldwide saw the need to do better. Operating in a mature industry squeezed by changes on several fronts, Starwood faced competition from disruptive newcomers such as Airbnb and online travel agencies, so it turned to analytics to gain a competitive advantage.

The Stamford, Conn.-based company takes guest data it captures through its Starwood Preferred Guest (SPG) loyalty program and turns it into insights that enable hotels like the Halifax Four Points to essentially recognize guests and put them in the rooms they'll like best. The initiative is known as the SPG Preferences program.

"The staff gets analytics showing them how their property is going to be filled based on preferences, so they can distribute their guests to fulfill the maximum amount of preferences," says Starwood CIO Martha Poulter.

Such insight creates more than a feel-good experience for guests, Poulter says. The ability to know and fulfill guest preferences improves customer satisfaction, which leads to higher customer retention, and -- you guessed it -- increased revenue.

"We have spent a lot of energy thinking through how analytics plays in that space, and what we've discovered is critical to our success," Poulter says.

Moving from dashboards to 'embedded analytics'

Starwood is one of a handful of organizations that are pioneering the use of analytics to improve sales and customer service. The company won an IDGE Digital Edge 25 award in recognition of the SPG Preferences program. Such initiatives are worthy of recognition because, while big data gets all the hype, the fact remains that analysis of that data is what drives results, and companies that have embraced analytics are in the minority.

"Many organizations are still struggling with data, but we're getting past that, so we're getting more accuracy in forecasts and you're making salespeople better," says Sheryl Kingstone, an analyst at 451 Research. "But this is not a quick journey. It's not an inexpensive journey, either. The other thing is everyone out there is calling themselves a data scientist these days. But that doesn't mean they have all the necessary skills. You have to find the right people with the right skills who understand your business, so they know where to find the insights."

Kingstone acknowledges that many companies are getting sophisticated analytics tools, and many are putting such tools to use in their lines of business.

451 Research

"Taking all the predictive nature, which used to be hard to do, and putting that in the hands of a salesperson, we never really had that before," she says, explaining that only data scientists were able to use analytics tools until more user-friendly options started to hit the market.

But even though some business people have moved beyond dashboards and reports to use what she calls "embedded analytics," Kingstone says most companies are still struggling to get to that point. In fact, many are still stuck on corralling the data itself.

"People are still working with incomplete or bad data. Data governance still isn't great," she says.

Newer technologies, however, are helping to mitigate that problem, automating more of the data governance process so that organizations have an easier time gathering the good data needed to feed more advanced analytics platforms.

A strong foundation helps

Starwood, which pulls together IT, business and analytics professionals to work on its data projects, is already seeing significant returns on its efforts. Kingstone says Starwood is among the leaders in analytics use.

Its SPG Preferences program, which launched in late 2014, accomplished two major feats. First, it captured and cataloged 42 features (ocean views, for example) of more than 360,000 rooms across nearly 2,000 hotels, thereby creating the foundation needed to make it possible to match guest preferences to actual rooms. Second, it resulted in the creation of a system that matches SPG member preferences on their arrival days to five basic preferences: bed type, high floor, no connecting door, best view and large room.

Getting to that point was no small task, but Starwood officials say the company laid a strong foundation that allowed teams to move quickly once they identified room preferences as an area that could benefit from analytics.

Like other organizations, Starwood gathers data from a variety of sources, including its loyalty program. Poulter says Starwood aggregates its data and keeps it all in a central database, where it's available for use for multiple purposes.

"What is very unique to Starwood is this very common view of data," Poulter says.

Starwood used mobile technology to fast-track the SPG Preferences project, says Alyssa Waxenberg, vice president of mobile strategy.

Waxenberg says capturing and cataloging hotel room features would have been done on paper in the past, with the data entered into the computer system after the fact.

"It would have taken months to achieve and been a real burden on the hotels," she says.

But her team built a mobile app containing more than 80 room attributes. Employees using the app could simply enter a room and check boxes next to each relevant feature. The completed form was then uploaded to Starwood's central systems.

"This was one of our greatest successes. Our associates, just like our guests, are doing more and more every day via mobile," Waxenberg says. "However, there are thousands of them across 100 countries, so language can be a barrier. This app was built to be self-explanatory with intuitive, image-based screens and had very few steps."

The app allowed Starwood to gather 13 million pieces of data in just three weeks, she adds.

Additionally, the tech team updated nearly 25 applications in the core 24/7 SOA-based reservation system to link SPG member preferences from the SPG mobile app and website to booking and reservation systems.

Poulter says there are more analytics innovations to come.

"There are so many possibilities, and we have no shortage of ideas, but we want to be smart about how we deploy," she says. "We want it to have a bottom- or top-line impact, so our owners feel it and our guests feel it."

Poulter points to Starwood's Revenue Optimization System, the company's latest analytics initiative, as a case in point. The system uses custom-built algorithms to help property owners and managers set prices to maximize revenue by analyzing hundreds of data points. She says Starwood estimates that system will produce a 1.5 percent increase in revenue per available room, although individual properties are seeing even higher returns. That Halifax Four Points, for instance, is experiencing 20 percent to 30 percent increases in some key performance indicators.

The old college try

Starwood's use of analytics has made it a standout in the hospitality industry, where use of big data is already well established, according to Kingstone. Travel and financial services are other leading sectors. Retail is getting there, too, but in general isn't as strong on the predictive side, Kingstone adds.

That said, there are notable analytics leaders in each industry.

Consider The Collegiate Licensing Co. (CLC). Another IDGE Digital Edge 25 honoree, the Atlanta-based trademark licensing and marketing company is harnessing analytics to drive business not only for itself, but also for its clients and their retail partners.

CLC works with nearly 200 colleges and universities, bowl games, athletic conferences, the Heisman Trophy organization and the NCAA to license their brands and sell their licensed merchandise. CLC's collegiate partners account for nearly 80 percent of the $4.6 billion retail market for collegiate licensed merchandise.

The Collegiate Licensing Co.

Those are strong figures, but CLC executives wanted to increase sales by better understanding the data they already had and any additional data they might be able to access.

"We've had several iterations of advancements in technology over the years to try to give our partners more factual data to make better decisions, but we got to a point where we realized that we had to take our data to another level," says CLC senior vice president and managing director Cory Moss.

The company started to build up its analytics capabilities using SAP BusinessObjects. It modified its online processes to capture sales data from more than 3,000 licensees across 200 schools, 60-plus product categories and more than 65,000 retailers in a Microsoft SQL Server data mart. CLC also brought in external data, such as ZIP code demographics, retail purchasing indexes and alumni and student data from its college and university partners.

It also developed consumer intelligence via social channels such as Facebook, Twitter and Instagram, which in turn made it possible to build consumer profiles used to create more effective marketing campaigns.

The Retail Intelligence tool -- as CLC has branded the system it developed -- came fully online in 2013.

A cultural shift

Wesley Richard, CLC's vice president of innovation and operations, says there's a dramatic difference in the company's ability to understand data before and after the project began. Instead of knowing only broadly how many T-shirts, mugs and hats were sold, for example, the new capabilities make it possible to create detailed reports on how many items sold in what locations at what prices.

"That's a game-changing moment, when we could provide data our partners never had before and couldn't get elsewhere," Moss says. "It revolutionized the decisions they made."

Moss says CLC hired two data analysts to gain the necessary expertise. And existing staffers had to adjust their mindsets.

"They needed in their own way to become more analytical in their thinking and approaches, and that was somewhat of a cultural shift," he says. "It required much more work on their end, so they kind of came kicking and screaming a little bit. But once they learned the institutions were requiring this to make decisions that would ultimately benefit them, they provided it and started to share it. And they actually started to volunteer that information and see how they could use information."

The Collegiate Licensing Co.

Similarly, Moss says partner companies at first balked at giving CLC more data. But just as CLC staffers embraced their ability to analyze data and provide insights to clients, the hesitant partners came around, too.

Richard says early wins were important. "Once you have a few conversations with the institutions, convey the value of this, their excitement level goes up and that rallies the staff," he says.

In fact, CLC says such efforts resulted in revenue increases of up to 50 percent for some schools.

In one instance, CLC's data analytics showed that a client, an institution with national brand recognition and alumni across the country, was under-represented at Walmart compared to peer CLC institutions. Using the data gleaned from Retail Intelligence, the university's licensing director was able to increase the school's presence at Walmart stores.

CLC hopes to share even more data. This year, the company has begun to migrate to a new platform based on Qlik technology; Moss says the move is designed to give analytics capabilities directly to CLC clients while also giving everyone a simpler tool for viewing data.

"Our clients were asking for more information, and we want them to make more strategic decisions so we needed to provide them with more information," Moss says.

CLC is part of a movement. Constellation Research analyst Doug Henschen reports that more companies are trying to put analytics right into the hands of end users to support better decision-making within the lines of business.

"Increasingly, the most popular and mainstream application of predictive analysis to sales is predictive lead scoring in systems such as Oracle Eloqua, Marketo, Salesforce Pardot and so on," Henschen says via email. "In this case, the predictive capabilities are built into the app, so there's a reduced need for wonky data-scientist types to develop bespoke analytical applications."

There is, however, a trade-off. "These approaches may not be as accurate as a custom-developed analytical app might achieve, but they are far more affordable and more than sufficient for the task of spotting the most promising leads," Henschen says.

Moss, though, says he knows CLC scored a win with the move to enable employees and clients to better access and analyze data. He says Retail Intelligence lets users analyze the data they need to identify opportunities for bigger sales.

"That's what makes it game-changing for us. Retailers win, manufacturers win, we win, our schools win, because we're growing sales and we're growing sales the right way," Moss says.

"And because everyone is winning," Richard adds, "everyone is stepping up to share data to make it a more powerful tool in the future."

This story, "Make analytics pay off for you and your customers" was originally published by Computerworld.