Contributed by Nicole Adair, Corporate Director of Revenue Management, SHR
Did you know that whenever you visit a website, make a purchase, complete a form, write a review, and so on, you are generating data that is being collected either anonymously or identified and tagged to you? In fact, there are 2.5 quintillion bytes of data added to the global data pool every single day. This means that when travelers search for and book trips online, they’re generating the same enormous amounts of data. Great, right? The thing is, as independent hoteliers, it’s very easy to feel lost among the big data crunching and marketing budgets of the major brands and channels. You need a way to level the playing field.In a recent webinar, SHR and I joined forces with HEBS Digital’s EVP, Jason Price, to teach you how to get a leg up on your competition by tapping into the rich collection of guest data right at your own fingertips. The following are some highlights of what we covered, and what we discovered.
What's at Stake
The cost to advertise is expensive and we all operate on limited budgets. Every digital marketing dollar matters. So, the more we know about the intended audience, the more relevant and targeted your communications can be, the more likely customers will buy from you. According to a 2018 report by Maropost, 61% of customers are more likely to buy from companies that deliver customized content, which translates into a 42% higher conversion rate with personalized calls-to action than with generic counterparts. And that means higher revenues.
So, you really want to focus on what is already in your possession and easily actionable. Because regardless of where your guests book, once they enter your doors, they belong to you because you possess information about them that no third-party can. Why is this so? While a major site may be able to serve up algorithm-based ads based on a potential guest’s browsing history, only you know that this guest, for instance, always books a certain spa service or heavily utilizes certain outlets, and you can use this to hyper-target your marketing. Add this to the fact that with proper pace reporting within the right CRS technology, you can easily see need periods not just overall, but by segment and even rate code, and you really do have a much more complete picture of what to target and when.
Types of Data
There is demographic data about who your customer is, how old they are, their gender, level of education, employment and income status and more; geographic data, which of course may include country, city, state, and zip code; conversion/reservation data related to the transaction, and behavioral data from what the customer does, such as fill in a form, visited certain web pages, time spent on site, repeat visits, and any other interaction on the hotel website. That’s a lot of data!
Your Approach
First, look at your booking window. If you have a set of reservations, and you know when they were booked, then you already have one key piece of data that you can sort and filter further if you wish. Your booking window data is key both for how it informs your knowledge of booking pace, and to target offers more effectively. If you are two months out and pacing behind, knowing the booking window of your various markets or segments tells your team where you can still focus to make an impact, and what would potentially be a wasted marketing spend. Next is length of stay (LOS). Looking at this will help in competitively and effectively setting rate strategy for different market segments, and again allow for putting your marketing efforts only where they will show a return. Both booking window and LOS data are particularly useful in avoiding unnecessary discounting. For example, you may wish to incentivize four-night stays for U.S. travelers in effort to extend their length of stay, but would not want to offer this same discount to European travelers who already average 7 nights. Then, look at seasonality and need periods. We’re all pretty comfortable with the concept of using marketing and promotions to address potentially slow periods. But it’s important to give just as much thought to how you will handle marketing for your property during compression periods or special events, as these can be great opportunities to focus on a branding message and really differentiate your property to your guests.
Last on the list, optimize your channel profitability. Every property should map out their channel costs and have a rough calculation of what flows to the bottom line from any given booking source. Each channel will have its own margin, commission, pass-through fee, etc. And, just as importantly, each segment will have its own average total spend. This information is so important to maximizing your bottom line. Don’t get so caught up in X% commission here or whatever net ADR there that you ignore the total amount of money being generated for your property. How does the spend of your third-party package guests in your outlets and F&B compare to the corporate discount that comes in with a TA commission and channel fee? This is important to keep in mind.
Putting Your Data to Work
You want to start with the PMS because it’s already paid for and in your possession, and likely feeds into your CRS. While PMS data will not provide a full 360-picture, it’s a good entry into leveraging guest data for more targeted marketing strategies. Extract the data from the PMS based on the most recent 12 months. Once the guest profile data has been extracted, cleaned up, and appended, you will have a strong starting point to build customer segments and run automated marketing campaigns. You could, for example, run an integrated marketing campaign to previous guests who have stayed and parked at your hotel. You could also try a campaign with a mid-week business rate park and stay, and only send to those who have not already booked over the next two weeks.
Going a step further, you might try running programmatic advertising in the Google Display Network, Facebook dynamic ads, as well as with third-party programmatic buying platforms. For example, let’s say you just built a guest profile list of AMEX gold card carriers who fly business class on Delta Airlines, traveling from LAX to LGA—all data pulled from your PMS. Now you can match this data with programmatic advertisers to target similar audiences who may also be in the market to make the same exact trip. Again, you are leveraging your existing data to find similar customers.
Budgeting the Right Way
It’s important to take the time to consider your reservation history data on a day-by-day and ideally, segment-by-segment basis when setting your next year’s budget concerning data. Start by looking at your guest profile data and customer segments. Look for opportunities on who, where, what, and when to market to these segments.
Then you can more accurately present a case on what is needed to invest for 2019. Ask yourself, do you base this on a percentage increase from last year’s budget, or on a percent of total room revenue expected? Or, do you base this on a specific revenue goal by season or need period? Whichever way you decide to structure the revenue and marketing budgets for the upcoming year, it helps to take a close look at various sources of information including your guest profile data to help support where to make the investments.
The Payoff
Naturally, the whole point of doing any of this is to have a 360-degree view of your guests, including your most loyal guests and highest-value guests. Because if you do, you’ll be more relevant and targeted when communicating with guests online and on property. Ultimately you will improve guest satisfaction, strengthen loyalty, and be in a far better position to retain and acquire new customers from your personalized marketing efforts.
