With occupancy rates sagging (around 60%) and an unpredictable economy, it may be time for hotel organizations to consider a direct marketing approach. In uncertain times, direct marketing thrives. Its ability to allow marketers to better understand customer habits, cut through clutter, instantly measure results and lower cost-per-customer means it can help deliver results in all three of these areas. However, before anyone sees results, marketers have to understand the basic tenets of direct marketing and determine the best strategy for fitting it into their marketing plans.
What is Direct Marketing?
The first step to determining if you’re ready for direct marketing is to understand what it is and how it differs from traditional advertising. The most important distinction is the ability to target the audience. Traditional advertising is delivered in mass media form, usually with the goal of generating awareness. This means a vast number of those in the audience are not prospects the campaign is trying to reach. Direct marketing allows you to identify your customers specifically, based on demographics, and target only them with your message.
Another difference in direct marketing is the inclusion of a Call to Action. This means the audience is asked to act and is given the means by which to do so. Examples of calls to action include inviting someone to call a 1-800 number or asking them to visit a Web site.
For companies whose goal is simply to generate awareness, traditional advertising may be a better vehicle. However, if you need to drive measurable sales through your marketing efforts, direct marketing is one of the most effective and affordable means available. In a climate where executives must account for every dollar of the marketing budget (and the “awareness” promised by traditional advertising is impossible to prove), the measurability provided by direct marketing is the most practical and effective choice.
Understand Your Position
Once you have decided direct marketing is the right strategy for your hotel organization, it’s time to do your homework. Before you can begin formulating a strategy, you have to find out how you stack up against the industry averages in terms of demographics. This will help you see places where you have already saturated the market and recognize opportunities to target new customers.
In addition, a little research will provide you with a benchmark by which to track your success. Too often, marketers begin a campaign without any reference to their current position then have difficulty determining the outcome because they have nothing with which to compare results.
Understand Your Guests
The next step in your campaign is to determine what the needs or problems of your customers are and how you can address or solve them. So, what are hotel guests looking for today? The resounding answer amongst hotel industry media is value. It’s clear attitudes toward travel and lodging have changed since the economy has weakened and the events of Sept. 11. Guests want amenities that promote relaxation more than ever and they want them for less.
The Internet has also had a significant impact on the hotel industry. Customers have access to more information than ever before and they are using it to bargain shop in ever increasing numbers. These facts change the way hotel organizations must communicate to be effective.
The smart direct marketer has an up-to-date customer database and knows it well. This database should include more information than date of stay, name, address and telephone number. Valuable information can be gained about guests when they pay their bill. You are able to track if guests used the gym, went to the bar, received a massage, ordered room service, watched a movie, etc. Your concierge or guest services coordinator can also be an invaluable source of information about your clientele.
Your customer database is a powerful tool for determining your direct marketing strategy. By constantly updating and analyzing it, you can learn the habits and preferences of your most profitable customers and keep them coming back by promoting those services and amenities.
Set Your Strategy
Whatever strategy you choose, identify it and lock it down before engaging in any direct marketing endeavor. Changing strategy midstream will be costly, in terms of money and impressions, and will cause you to lose valuable time reaching your targets.
Once a strategy is settled upon, it’s time to determine the best communication how to send your message. Once again, your customer database is a valuable resource. Collecting information from your guests regarding preferences of contact methods can be used to determine the vehicle for your message.
This is also where you need to decide your cost-per-customer, or your “allowable”. An allowable is the amount you can spend in marketing to obtain a customer. You must also identify a minimum number of customers that must be brought in to make an acceptable return on investment. The allowable will vary greatly by company. For example, The Plaza Hotel in New York, NY, may be able to spend a few hundred dollars to obtain a long-term customer, whereas the independent motel owner may only be able to spend $2 due to leaner profit margins.
The dynamics of determining the cost-per-customer of a campaign can be complicated depending on the extent of the campaign. For accurate results, it’s best to work with a direct marketing professional. Regardless of the amount, basing your marketing in terms of customer acquisition gives you the ability to expand or retract your direct efforts. This scalability will allow you to keep your marketing in line with the growth of your organization: so no matter how big or how small, your direct marketing efforts will always be adding value.
Find The Offer
Now that you’ve decided on your audience and strategy, you need to develop your offer. Your offer should be compelling and relevant to your audience. Your offer should create the feeling of a one-on-one conversation and should inspire the audience to act, now!
Implementation
Once the research is done, you’ve identified your targets, the vehicle is chosen and the offer is determined, you are ready to implement. Most direct mail campaigns require marketers to buy some sort of list. The lists can be as general as a list that includes all people who subscribe to a newspaper, or as specific as a list that includes people who tend to eat at the restaurants of the hotels in which they stay. The target you want to reach will determine what type of list you need.
Good resources to find lists include your own database as well as list brokers that can help identify the right list for your marketing goals. A direct marketing agency would have access to any number of lists and might be helpful in locating very specialized targets.
Don’t forget, you also have the ability to test in the implementation stage. Start by implementing only a small portion of the campaign. You could even try two or three different messages to see which resonate the best with your audience. Use this opportunity to make any necessary modifications prior to full implementation.
Measurement Tools
Though it might not be sexy, measurement is where the real fun starts. It is at this point that you find how much of an impact your campaign is really making. There are many tools available to direct marketers for measurement. Dedicated toll-free numbers have become more affordable and telecommunication companies typically provide a detailed call report with the billing. Simply assign a dedicated number to your direct marketing vehicle then, when the bill arrives, review the usage report to learn how many customers are taking action in response to your direct marketing piece. Other easy tips for tracking include:
· Dedicate an e-mail address in a banner ad.
· Re-name or change price points on existing packages when running newspaper or magazine ads. As customers request the dedicated packages, the effectiveness of media placements becomes clear.
· Insert unique business reply cards in direct mail, magazine placements or brochures.
· Coupons are still strong tools as well. They can also be distributed as special gifts for discounted rates on the guests’ next visit upon check-out.
· The most important tool in a hotel organization’s direct marketing box is the reservations department. Every time a reservations agent picks up the phone, make sure he or she takes a few seconds to discover how the caller learned about your organization.
So, How Did You Do?
Make sure all the data collected makes it into your customer database. While this is the most tedious task of direct marketing, it is also the most important. It requires working with some notoriously un-cooperative departments such as sales, reservations and the front desk, but it must be done or all the other time spent on your campaign is wasted. It is imperative that the information collected from one campaign is used to your advantage in the next.
Once the data is funneled into the database, you are ready to determine your ROI. It is at this point where you will see the value of your campaign. If it was successful and met or exceeded your expectations, look back and see what factors made it so successful. If not, make sure to re-visit your process to identify what might be improved upon. Maybe you didn’t identify your target clearly enough or perhaps you didn’t use the best vehicle possible. Whatever the reason, identify it and change it to make your next direct marketing effort a great one!
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