As privacy regulations change around consumer data, hospitality brands must find new ways to meet customer demand for personalized messaging and offers. With third-party cookies phasing out, creating a first-party data strategy is the key to collecting, enriching, activating, and protecting your guests’ data.
In this video from Skift Future of Lodging Forum 2023, Josh Beckwith, managing director of global strategic accounts and partnerships at Sojern, and Sofia Rovnova-Nixon, director of media strategy and martech at Marriott International, share everything you need to know about getting started with first-party data.
Josh: First-party data is the data that you as an advertiser or a client own. It's the data that your customers give you through things like newsletter signups, bookings, intent, your website, through loyalty, which we've heard about this morning as well. For the longest time, internet targeting has been based on what we consider third-party data, which is the aggregate of lots of other people's data stitched together to create a profile that you can then target.
Increasingly we are seeing that being eroded by the changes in digital media and the importance of first-party data is just growing month over month right now. So, we've heard today about CRMs, customer relationship managers, we've heard about loyalty schemes, we've heard about hyper-personalization. All of that is kind of tied together by these first-party data assets, and all of it's really important.
When you look at consumer behavior, 80% of consumers are more likely to buy from you when there's a personalized service or offer. So, our friends at Epsilon did this study and they told us the importance of that data to your ability to sell more effectively.
Sofia: I’ll start with the challenges and what we perceive the biggest challenge to be. I'm sure it might resonate with a lot of people in the room here as well, is actually collecting the data and ensuring that you are compliant with all of the restrictions and regulations. We value the privacy of our consumers and we always want to be very in tune with what they are comfortable with and actually giving us in way of their information. Of course, being in the kind of global hospitality industry, a lot of our customers are based all over the world, so we need to be very mindful of what the restrictions and policies are in the areas where our consumers are based.
The second challenge is once you've collected all your wonderful first-party data, what do you do with it? How do you actually use it? How do you segment it? How do you get value out of it? Just because you can measure something, it doesn't mean that it's actually going to be something that's useful to you. Your consumers might not see value in it or you might not see scale in it. So, those two are the challenges, which are very big challenges to overcome.
But if you do get it right, the opportunity on the other hand is phenomenal. So, starting with the main reason why we would do this in the first place, is to really provide relevance to your consumers. Be there at the right time with the right message, and in turn, if you do the relevancy part right, what you stand to gain from it is personalized touchpoints all throughout your user journey.
So, not just in the marketing upfront, but also when it comes to their digital experience with your website. You're building customer love and customer relationships by providing them with tailored messaging throughout their experience with you as a brand. Again, if that is done right, what you stand to gain is maximizing your profits. Because you'll be able to look after that consumer on a one-to-one basis and you are really going to grow the way in which you can communicate with them and what you're able to tell them and what you're able to sell to them.
Josh: Privacy regulations are critically important to the use of first-party data. From a consumer point of view, 71% of consumers say that they're willing to share that data, but 68% of consumers are worried about the processing of it. So the onus is on us as marketers to make sure that when we are giving access to that valuable resource, that personal resource, we're using it in a responsible and agreed-upon framework that makes the consumer happy with the value exchange.
When it comes to privacy, obviously anyone in Europe would've been through GDPR a few years ago, which was a great learning curve, and we're now seeing that kind of spread across the US. It started in California. There are now five states with legislature around privacy and 21, I think, who currently have active bills looking into this. So, really staying abreast of all of those different privacy regulations by the market is really important.
We talked about consent earlier this morning on the stage, and I think collecting consent and being transparent about the data use and what they're going to get from it, transferring that consent to your partners. So, make sure that when someone's opted in, they understand who is going to be using that data and for what purpose. They're also given the ability to exit, opt out, and profile deletion. Make sure you're talking through consent, you are working within the regulatory frameworks of the region, and you're being transparent with the customer
The hashed email is becoming the identifier across digital marketing, which is your email, then hashed algorithmically so that you can't be recognized as yourself. That email can be recognized within the ecosystem, like you can now collect that more personal identifier than perhaps a cookie ID, but you can do it through these frameworks that make you as an advertiser comfortable, but also your consumer comfortable that the data they're giving you access to is being used in an ethical manner.
Sofia: I think what's important to remember with a first-party strategy is, it really is a marathon, not a sprint. You are unlikely to go into your first foray into using first-party data and audience segmentation and nail it absolutely straight away. It's not going to happen. Well, at least it's not what happened for me. It's a long road to test and learn roadmaps, ensuring you have a very successful north star of what it is that you're ultimately trying to achieve, and the roots and iterations that you're going to take to get to this ground division ahead of you.
Where we started from and where I think is probably the most sensical part to start is really understanding your consumer. So from all of these data points that we're able to collect, how can we group them together, how can we make them scalable, and how can we make them something that's important to our customers. I think we talked so much on stage already about personalization and what that means to our guests and also all of the little breadcrumbs that our consumers leave us when they are staying in our hotels.
I think we've had some really great examples from the Jumeirah Group about how they do this, and we're more used to picking up on these cues in face-to-face social circumstances as part of the hospitality industry and how we personalize our services on an everyday basis. But for us, the consumer journey starts much sooner than the person actually visiting the hotel and walking through the front door. So, it's picking up on their past booking behavior, how they interact with our marketing and advertising, how they interact with our member communication, and what their loyalty status is like. Combining all these different aspects into one holistic profile that is actually meaningful to us as a brand and what we can use to leverage this.
From audience segmentation then comes the deployment process, which again, goes through many rounds of iteration to ensure that you have enough scale, that the audiences are responding well to the message that you're sending, and we are not generalizing any of our audiences. We don't want to stereotype, we don't want to use generic demographics as something that we would pin any of our marketing communication towards.
Then from that, we start to continuously do the feedback loop and learn from it. Running some of these new audience segments and new audience types, we have seen a 1.2% point increase in our audiences being more likely to take an action. So, to make a dated search or to view our property pages versus using generic in-market travel segments, and year-on-year, we are aiming to invest more and more of our money into first-party data. Of course, this goes to future-proofing us in a digital world against cookie deprecation and loss of that trackable identity.
Josh: My advice would be urgency. Start today, if you haven't already. Go back, speak to legal, understand your consent, and understand your data processing agreements. If you have a Data Processing Officer (DPO), if you've already started—great—keep charging. The legislation tidal wave is only moving faster. Getting ahead of this is a great move for any business right now.
Sofia: I'd say really get in there with your legal team, and be their best friend. It is going to be a partnership and a work of love between the two departments. But ultimately, start with your customer's mind first with everything that you do. If it's not offering relevance to your customer, if it's not offering value to your customer, then rethink it. You don't have to do it if you are not going to make your customer's life better.
In our report, How Hotel Brands Are Using First-Party Data to Drive Revenue & Build Stronger Relationships, we discovered that market research is the #1 resource hotel marketers trust when planning first-party data programs. If you’re looking for more information on first-party data collection and activation, here are a few resources to continue your research:
When you’re ready to take the next step with first-party data collection, chat with one of our hotel marketing experts today.
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