If you want to make the most of your ‘big data’ to upsell more to guests, you need far more than business intelligence. Pamela Whitby talks to a company that believes it is getting close to perfecting the art of upselling.

Every guest loves an upgrade but just how many would be willing to pay for it?

According to Jason Bryant, Founder and Co-CEO at Nor1, a company dedicated to upselling, 20% of guests offered the ‘possibility’ of upgrading to a better room priced below the usual rate will say yes. “It’s a win-win because the hotel has revenues it wouldn’t have had from unsold inventory and the guest is generally much happier because they have a higher level of service,” he says.

Launched eight years ago, Nor1’s business has been built around its eStandby® product which today is used by big names like Hilton, Hyatt and InterContinental. “We are trying to solve the problems hotels have with pricing and merchandising of unsold inventory, and building revenue and loyalty within their direct booking channel,” he says.  “The value to the hotelier is that we offer this on a performance basis. There is no financial risk as we only share in incremental revenue.”

But today the company is going much further and believes that it is a huge, yet to be realised, opportunity to upsell at all points of the guest’s reservation cycle and beyond.  “About three and half years ago we realised we had access to huge amounts of data as a result of our work with hotels,” explains Bryant, who passionately believes that hotels can drive more revenues through real-time decisions and better utilisation of their inventories, while at the same time improving the guest experience.

“We’re at the tip of the iceberg,” says Bryant, explaining that Nor1 recently raised $9million in a series B funding round. “With this, we are building out a stable and robust platform that will use big data and predictive analytics to leverage the information we have across the entire hotel enterprise.”

Confusion reigns

Of course big data, analytics and predictive analytics are key phrases here but Bryant is quick to point out that “these terms get thrown around but there is often a confusion around the different levels of analytics.” Most organisations today, he says, are familiar with business intelligence; they will have a variety of ways of slicing and dicing data to achieve a segmented view of the business. Many firms will have ways of finding data and then reporting on it. A human will be involved in interpreting the data and making decisions based on it. At the next level data a predictive system will help make more accurate and measurable decisions based on different conditions.

The final level, where Nor1 is focusing its energy, is the ability to do all this in real-time and as precisely as possible.  Not only does the system it is building make measureable recommendations, it actions them too. “This is true personalised e-commerce,” says Bryant, who explains that Nor1 does this by pulling data that tracks as many as 200 variables to facilitate truly relevant personal offers at the right time.  From 200 variables the system comes up with a mathematical representation from 15 variables. It then looks at around 5,000 past transactions of other guests that match this persona. It is not simply basing recommendations on a single guest’s past five stays. Not only does the technology enable a hotel to answer questions like: ‘what product should I be offering the guest right now?’ It also answers more complex questions: ‘should I even be offering a service right now’ or ‘is this the right time to make this offer?’

If it sounds complex, it is. “We employ PhD level mathematicians and statisticians to build the technology because that’s half the battle,” stresses Bryant.

Going even further

While hospitality firms touch a guest at booking, then in the confirmation and pre-arrival email and again at the front desk (Nor1’s FrontDesk Upsell™ product empowers front desk staff to make guests the right offer at check-in while at the same time collecting the results) far more can be done ‘intra-stay’. “It is really important to understand the guest at this very important time but in order to make the right offers you can’t take a traditional business intelligence approach as things are happening too quickly,” says Bryant.  Indeed guests now make rapid decisions, which is mainly down to the proliferation of mobile devices – another core focus for Nor1. “We’re really investing to perfect offers made via mobile (eg reducing key strokes) during a guest’s stay,” he says.

When it comes to ‘mobile’ big data, it really is the tip of the iceberg.