ZDirect's RFM analytics identifies guest spending patterns

2ZDirect launches its recency, frequency and monetary modeling (RFM) functionality. ZDirect's innovative eCRM platform can now analyze the spending behaviors of each guest and provide staff with an easy to understand numerical value that serves to score a guest's financial value to the property. With RFM, hoteliers can observe a guest's most recent spending, how often they may make a booking/purchase and what the value of his or her bookings, upgrades and purchases tend to be. Equipped with such data, hospitality professionals can effectively identify and better target guests that belong to their highest spending brackets and most valuable marketing segments, while also allowing them to recognize and devise a marketing strategy for guests that have reduced their spending with the property.

ZDirect RFM's proprietary analytics feature an unique algorithm of data science that computes and assigns a comprehensive score for each guest, based on their purchase recency, booking frequency and monetary value of each purchase made. When combined with ZDirect's lifetime value analysis, functionality that supplies regression models to property staff with a real-time prediction of a guest's lifetime value in monetary terms, the two services complement each other to create various segments of guests; groupings (bins) that are organized into equal width or equal frequency with respect to value. A model is then generated that can forecast which tier a guest should belong to, based upon their future revenue-spending potential.

In using a scoring system to evaluate the value of each guest, RFM assigns points for nights spent per stay, as well as each stay in general. Recency of visits and how much was spent on each stay is then factored in to calculate lifetime value. As a property's marketing department becomes more familiar with RFM analytics, additional Recency bins can be added for increased segmentation and guest spending behavior insight. RFM also provides the added advantages of increased survey responses, through its use of segmentation and by targeting guests with relevant email marketing content.

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When combined with predictive and descriptive analytics, a hotel's eCRM efforts can attain a significant boost in effectiveness given the existence of a centralized and much more comprehensive profile for each guest. With guest profiles incorporating both an RFM score and Lifetime Value information, marketers can be assured that past, present and future guests' preferences are accurately represented. This ensures that any electronic surveys or promotions can be customized to address specific tastes or needs, and therefore dramatically increase successful response rates.

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