Micro-Segments: Understanding Your Guests

Previously when we discussed hyper-personalisation, the crux was deploying personalised services at the most opportune time. We were able to aid our partner hotels through data and analytics and help them provide the best guest experience for their guests. These experiences led Portier to become one of the industry’s leading solutions in terms of efficacy rates of revenue conversion. We were also instrumental in providing insights to help our partner hotels understand their guests’ needs better.

With the limited flow of travellers in the past two years, it has become clear that just purely knowing who your guests are is not going to cut it. Hoteliers have to learn to unlock micro-level insights about their guests’ behaviour, wants and needs and preferences to power hyper-personalised experiences. The guest journey has to be carefully mapped out, with intricate design in every step of the way to give the best customer experience. Purely understanding guests at a superficial level will not give you the upper hand, especially not in these times.

Photo by Rob Wilson on Unsplash

What do we mean by understanding guests at a superficial level? Let’s delve in deeper. According to McKinsey, hotels have to move from a ‘monolith’ strategy to one that introduces ‘micro-segments. This means that categories like “business travellers”, “bleisure travellers”, “millennials” or “Gen Z” are outdated and hotels should pursue a way to further break down such broad categories into more specific ones.

The definition of micro-segments is as such; grouping consumers into small segments or even specific individuals and targeting them with more precise messaging based on behavioural patterns and needs. Some examples of travel micro-segments are “25 to 35-year-old male digital nomad” or “a group of college students from Hong Kong on spring break”. While it is also possible to “stereotype” these travellers into other categories, what hotels can do is to perhaps set parameters of a criterion that allows them to collect enough data to define a specific micro-segment. The beauty of micro-segments lies here - the fact that it is dynamic and ever-changing, unlike previous “monoliths” where segments are static.

This means that the same traveller can provide hotels with rich data about themselves depending on the micro-segment hoteliers place them in. Data from these micro-segments are especially useful when hotels can extract meaning from them. From there, it sets the scene for hyper-personalisation which ultimately enhances guest experience and guest satisfaction.

Why is that Important?

In this particular McKinsey survey, it was found that good customer experience led to a multitude of positive things. First of all, good customer experience led to a 20% increase in customer satisfaction, 20% lower cost to serve, 30% increase in employee engagement and most importantly, a 15% increase in revenue through retention and acquisition of customers.

Understanding, Not Knowing

Like we mentioned above, the biggest key to recovery lies in how hotels strategically adapt to learn to understand travellers wants and needs. Just simply knowing is not good enough in this line of business, but with micro-segmentation, hoteliers will be able to unlock a profound understanding of their guests and develop core marketing strategies for acquisition and retention.