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Ringing it Up: Bringing CRM to the Hospitality Industry.

Loyalty programs have traditionally been the backbone of what is now referred to as customer relationship management.

But what if you're in an industry that's been behind the times? When was the last time the person behind the cash register in a nationwide chain restaurant remembered your favorite beverage?

It's notoriously difficult to capture and access data at the point of purchase--particularly when you're a multi-unit operation dealing with dozens of restaurant or hotel chains around the country. Yet rewards generated at the point of sale based on an individual customer's purchasing history are a valuable loyalty tactic.

That's why Charlotte Bogardus, chairman and founder of Gazelle Systems, makes such pertinent buying information available to her clients through software accessed at the point of purchase.

Says Bogardus, "We wanted to bring the type of feedback available to Web marketers to the offline world."

According to Bogardus, the CRM applications of Gazelle's are two-fold. The first are the strategic applications, which include helping partners identify buying frequency (through growth metrics), churn rate (to help tease out the very best customers) and new trial rate.

Here's the exciting part, which Bogardus calls "true CRM": Professionals in the hospitality industry use the multi-layered customer information reports to target customers within their geographic area who fit a particular profile but aren't currently patronizing the restaurant.

The success of such an effort is then tracked by credit card records within a certain geographic area to look for an increase in sales.

Gazelle builds customer models by capturing credit card information at the point of sale, and then appending name and address information from an overlayed database, what she calls a "reverse appending process."

According to Bogardus, the information restaurateurs are able to gather through this method can lead them to myriad marketing possibilities. Some of the company's partners have even used it to help develop creative for new direct mail efforts targeted at high potential customers.

Among the possibilities for restaurant customer loyalty programs are free wine testing for customers who prefer chardonnay over merlot, priority seating/pricing or shorter waits for high-ticket customers, says Bogardus.

Turn Numbers into Dollars

Finagle-a-Bagel, one of Gazelle's partners, has found several uses for this information. The club cards Finagle-a-Bagel started using were on the right track, Finagle's director of marketing Heather Robertson says, but weren't meeting the changing needs of its customer base. As people moved away from buying just bagels and the restaurant became a popular lunch spot, the bagel reward system was less effective. Plus, she says, since customer records weren't stored electronically, the restaurant was left open to a lot of fraud.

In an effort to find a system that wouldn't crash with its high volume of sales, it implemented a new P.O.S. in conjunction with Gazelle.

Since June every Finagle location has been outfitted with the dual software solution, and there are currently 23,000 "Frequent Finaglers" in the database.

At the time of sign-up, a guest fills out an application providing as little or as much information as she's comfortable with: at most, she can inform Finagle of her name, address, birthday, business, names of family members and favorite bagel.

Cards are issued even to those who provide minimal information. The Boston franchise finds a loyal customer base in the FBI office located above the store--a group unwilling to divulge even their names!

The cashier activates the card by swiping it, and the new customer is entered into the home office database within two days. Further customer interaction from that point on is updated automatically at the point of purchase.

Once this information is in the database, it's accessible at every point of purchase and can serve as a frame of reference even during a short transaction. At a traffic rate of 1,000 customers during peak times such as the lunch hour, this is no small feat.

Robertson says Finagle puts customer information to other uses, including promotions to welcome current customers to a new location; special deals to encourage greater off-hours traffic; and as background on those who call the company's customer comment hotline.

As Robertson says, "The use of a customer's name every time he or she enters the store is a point of contact that's very valuable to us."
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Publication:Target Marketing
Date:Apr 1, 2000
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