Is automated predictive personalization working?
Professional Expertise & Algorithms VS Predictive-Personalization
Personalizing content (aka Targeted Messages or SMASH) is a way to improve the customer website experience and make it more relevant and, therefore, convincing. There are different approaches to personalization tools on the market. The first approach to personalization consists of collecting historical data and use this information to create automatically targeted offers. However, our approach is different.
As a result, marketing/sales hotel professionals play a key role in targeting and personalization. Certainly, it’s a very attractive idea – to have a magic pill, automatize the lead/conversion process and spend as little time as possible. The reality is that the automatization-first approach doesn’t perform the best.
Even more, with the COVID-19 crisis Revenue Management systems (RMSs), prognostic and price-suggesting features failed completely.
The point often overlooked is that automated price optimizer systems use previous periods of data, which is less than relevant for the 2020 situation. To emphasize, we don’t have valuable statistical data for the crisis of this scale, we do not have a mathematical model, how the recovery process will go, we can not correct the demand but simply lowering the prices. Even the most intelligent AIs can not provide the right pricing strategies.
To improve performance in the future, more likely in 2022, the majority of automated RMS will exclude data from 2020. By all means, it is an exceptional timing, and current reservation behavior is not useful for ordinary times.
An automatization is just a tool, not a panacea
For sure, RMSs help to aggregate and analyze a lot of information. Nevertheless, the final pricing decisions should be taken by humans, by hotel professionals.
In 123compare.me we believe that we should always rely on the professional expertise of our client. And only after that, rely on the analytics. Albeit automated predictive analytics sounds good, we believe that professionalism delivers better results.