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The Right Customer

I was reading an interview of Puneet Mahindroo who heads the Revenue Management & Distribution at Taj Hotels and he points out the Right Customer being the most critical to address.

Well, I agree to this (and more so considering that I have worked with the man and have been influenced a lot on the RM front) and more so it makes me recall the RM definition of how the Selling of the Right Product at the Right Time to the Right Customer got modified a bit and there came in the selling through the Right Distribution Channel as well.

The competitive pricing in our industry has over the years made us look back to not only our revenue streams but also on the expense side as well. And for three years with the Taj where I was managing RM at various positions, I preached on the original theory but at the same time realized the importance of the distribution platforms as well. The clear and definitive balance that acknowledges long-term and sustainable customer relationships, as he points out, is important to our business and equally important is the fact that the short term tactical rate optimization should not harm this balance. However, this is where I feel that we have a great task on our hands.

India is still going through its learning curve as far as the OTAs and E-Distribution Channels channels are concerned in the lodging domain. And the trends have been exciting and alarming at the same time. I remember, once Expedia representatives were giving us a presentation on their company and the stated that for every 3 people that come to their website, at least 1 calls up the hotel directly or books on hotel website for the booking. So it also acts as a search engine for various customers.

3 years hence, when I am part of a corporate profile and manage my own hotel bookings (unlike the other verticals in my company) within India and abroad, I have realized the importance of Expedia, Travelocity, Make My Trip and most importantly the one that I am hooked upon – Kayak!! And this is all when the company does enjoy special corporate rates with various hotel companies. But a little effort and I end up saving a considerable amount – either for my company or the client who is paying most of the times for my hotel stay.

So, going back to the Right Customer, I am not sure if this balance is as easy to maintain as it’s said. There is supposedly one strategy at the hotel level that drives revenues. This strategy is totally inclined towards the past year performance (usually numbers thrown by a PMS) OR the effort of the sales person to convince the unit to give a better rate on account of overall importance of the account.

Then while on the grind, the task for the RM gets into a different mould of striving to achieve budgets and maintaining the first position in the RevPar Premium City Set. And this is where the magic lies. The magic of getting into a tangent mode and there you have a new RM strategy which drives its’ own numbers and who cares about the Right Customer??

I wish the likes of Optims (Amadeus RMS) and Ideas will be able to account for the customer (company) profile, it’s loyalty to the unit hotel and/or hotel group and then throw up the numbers that it does while the Group Tool is used. And I am assuming this is being used and not that they are being used for taking out lovely graphs for the RM & Projection meetings on weekly basis. And if not, I think there is a lot required to be done at the shop floor level on training people and most importantly retaining them. You do not want to be training ground for the Alofts, Four Points, Hiltons, Dusit Thanis, Moevenpicks of the world to come over into your country and take over your most important asset – Employee apart from the Customer that they will take for sure as all are to eat from the same pie.

RM is both a Strategic and Tactical function. And Puneet did talk about this as well. There needs to be a 1-3-6-9-12 month strategy in place and within the current month, there can be a week to week and day to day detailing (Did someone say – God is in the Details!!). Some time back I was presenting a proposal to the owner, GM, DOS and RM of a leading Delhi hotel on a RM assignment considering that they are really lying low on the city set chart. The DOSM who had recently joined came into defensive and it was hard to convince him. My only question was what is the strategy to tap the Def Expo business for next year when you have an open rate of 8000 Rs available on the open channels and realizing that there is always a short supply of rooms in the city and the Def Expo participants usually book much in advance. The answer to that was simple that I could figure out– There is no Strategic Policy in place. And the result will be again for him and the team to see.

While we all will continue to talk and debate about so many things to be done on the RM front, I have rarely seen a concrete road map for this. With new kids on the block every 1 year, I am sure it does get difficult for the RM bosses as well to put their thoughts into action. How many of these new kids have even realized the importance of the hot seat they are in. One pricing decision can impact revenues to a great extent – Right or Wrong is anybody’s guess. One has to live in the future to be a leader but at the expense of not realizing the present, it can bounce back hard.

I wish the roots are strong enough for any organization to take care of the fruits that will hang over a period of time. And to strengthen the roots, you require good nourishment in the form of motivation and regular training. And I hope it’s’ done soon.


October 14, 2009 Posted by | Uncategorized | , , | Leave a comment