A Framework for Evaluating the Business Value of Customer Data in Hospitality

Abstract

ABSTRACT The unprecedented volume of data captured by modern hospitality firms during the co-production of the service experience can be used to create economic value. In this article we provide a set of frameworks grounded in the cross-disciplinary literature in information systems, strategy and marketing, to conceptualize what data-driven initiatives will align best with different firm strategies and value propositions. The first framework enables a disciplined industry analysis by enabling joint evaluation of the theoretical repurchase rate, degree of customizability of products and services, and degree of unobtrusive data capture that characterizes a given firm's value proposition. The analysis then moves to the individual initiative's level and offers guidance as to how to identify and prioritize these specific data-driven initiatives. This process starts with identifying the key transaction processing systems in the organization and inventorying the data they capture and store. After envisioning possible initiatives that leverage these data, the methodology suggests a way to prioritize projects to ensure that only those offering positive returns are implemented. A case analysis is used to illustrate the use of the proposed frameworks.