4 Ways to Transform into an Insights-Driven Enterprise
In the past, hospitality IT helped executives understand what had already taken place at their business. Today, modern platforms, cloud-based services and tools such as APIs make it possible for operators to enjoy much faster access not just to data, but also real-time insights across the enterprise, enabling them to be much more nimble and responsive to rapidly changing guest demands. Forrester Research Inc. calls these types of companies “insight-driven businesses,” noting that smart enterprises that use “data, analytics and software in closed, continuously optimized loops to differentiate and compete are on pace to make $1.8 trillion annually by 2021.”
Operators face an array of challenges in transforming organizations into insights-driven businesses. They include amassing and cleansing all of the needed data as well as overcoming disjointed technology stacks. Hospitality IT leaders say the technical hurdles are more easily surmounted than the cultural ones. After all, hospitality is at its core a people business, and the idea of relying heavily on math to run it strikes many as cold and impersonal.
Helping the workforce view data-driven insights as empowering and not threatening will allow staff members overcome their cultural biases. Ensuring that everyone across the enterprise, from ownership to frontline staff, embraces this shift is key to making this critical transition.
1 Infuse Data into the Culture
Hospitality staff often pride themselves on their ability to read customers and adjust accordingly, but this is difficult to do at scale. Therefore, it’s important to position data-driven insights as enhancing, rather than displacing, those skills.
Leon USA faced two cultural hurdles at once: adapting its UK and Europe-forged “naturally fast food” brand to U.S. tastes and infusing more sophisticated data-driven insights into its operations. Leon launched L Street in Washington D.C., starting out with 95% of its European menu and then leveraging Fourth’s latest analytics capabilities to tweak and adjust.
By overlaying net promoter and value for the money scores as well as things like current weather on top of the existing menu, daypart and market basket metrics, “We now find the ability to analyze data and give it context versus just pulling numbers out of the system,” says Glenn Edwards, managing director of Leon USA. That enables a manager, for example, to quickly adapt to new customer behavior patterns by adjusting the next day’s staffing or stock orders.
To get buy-in, the company positions data as a helpful tool and managers as data owners. Instead of positioning the use of this data as a means to higher company profits, greater efficiency or working staff members harder, Edwards says the company positions the data as an important way to make team members’ lives easier and the customer experience better. This not only leads to greater staff member buy-in but also harmonizes with the company’s values and culture. Additionally, graphical representations of the data makes it easy for workers to absorb new information at a glance.
2 Encourage Workers with Incentives and Quick Wins
Positive messaging has also been key for New England Authentic Eats, operator of Papa Gino’s Pizzeria restaurants and D’Angelo Grilled Sandwiches. After a November 2018 bankruptcy and the abrupt closing of nearly 100 stores, the new ownership needed not just a new strategy and tools, but also to win back the confidence of its team members.
To win back customers, the new management invested in a digital customer engagement platform from Mobivity to better understand what drives guest behavior and to develop data-driven, customized campaigns to help drive frequency, spend and ultimately growth. They gained the buy-in of long-term, widely trusted brand owners in each chain to evangelize about the program to staff members, explaining that there would be cash rewards and prizes for team members who helped to market the program.
“The immediacy of the text messaging program was very compelling,” says Deena McKinley, acting CMO. “We had an all-hands meeting where we talked about it with area managers in the field to get them excited. We’re looking at people that hadn’t seen bonuses and incentives in a long time before the ownership change, and to come out of the gate and offer incentives and offer prizing and dollar cash rewards for doing these things really motivated people, and it got them excited about the future.”
The results speak for themselves. Team members (in conjunction with other marketing messaging) prompted guests to sign up for the loyalty program and share their mobile phone numbers. The subsequent SMS messages garnered nearly 14x the redemption rate of the same offer sent via email. In three months, the campaign drove more than 25k transactions and $125k in attributable revenue.
3 Coax Independent Owners to Invest in Insights
Before courting the workforce to trust data-driven insights, brands must often first convince franchisees and independent owners to make an investment in technology that may not have immediate — or simple to prove — ROI.
Eight-property luxury and ultra-luxury brand Montage Hotels, for example, does not have the deep pockets of its larger competitors. Gustaf Burman, SVP of IT, was able to use that to its advantage when proposing a strategy to layer new guest behavior analytics capabilities on top of the financial analytics infrastructure it had already established.
“Sometimes it benefits us to be second,” Burman says. “The industry is quite small, and Montage property owners who also work with other luxury brands already using analytics technology can talk about the benefits they have experienced.”
Those new capabilities will import data flows from its Oracle Simphony Cloud, OPERA, a new CRM system and credit card data into the company’s existing data warehouse to build data cubes. These cubes will help Montage better understand guest spend behavior across lodging, food, ancillary services such as golf and spa, and its club and branded residences.
With so many stakeholders needing to view that data differently — not to mention buy-in to the use of data-driven insights — Montage IT spent lots of time learning and understanding their specific needs and designing dashboards that convey those insights clearly and graphically.
“I think part of it is … how do you easily, securely and without too many hoops to jump through, give real-time access to this data,” Burman says.
One of the company’s plans is to eventually use some type of digital layer to deliver relevant insights directly to mobile devices.
4 Adopt Open, Educational and Collaborative Practices
Sharing the insights each stakeholder needs to execute his or her piece of the business is invaluable. Helping staff see the big picture can also motivate changes in behavior
Austin, Texas-based Kerbey Lane Café adopted an open, educational approach about three years ago when the company began practicing open book management. Today, any worker who is interested can learn about the P&L and participate in weekly huddles where each location forecasts its costs and sales. Those in leadership positions, from shift leaders on up, collaborate weekly on data and analytics compiled in its Compeat Intelligence (RADAR) restaurant management software.
As growth has slowed in the crowded Austin marketplace, the company has shifted from a cost-saving to a sales focus. Team members not only collect guest feedback as part of a campaign to deepen understanding of consumer behavior and preferences, but also to learn about the resulting data alongside financial results to understand goals in context. Scoreboards posted in staff areas reinforce that message.
“The communication piece is vital in making sure that everyone in the company knows what to focus on and that they’re all talking together,” says Michael Jackson, VP of IT. “When you’re looking at that metric, people have stories behind it and then we start connecting the two together. Any assumption goes away, and you make very effective decisions.”