Every hotel wants more loyal guests. The rewards for individual properties are well documented; loyal customers:

• Are less likely to be lured away by a competitor’s marketing efforts
• Require less marketing expenditures to encourage return visits
• Are more likely to recommend a hotel to friends and relatives – in person or by posting to an online review site like TripAdvisor

And more importantly, research shows loyal customers, when managed properly, are significantly more profitable than an average guest.  The Intercontinental Hotel Group reported that members of its loyalty program are twice as profitable as their average guest and those members who earn elite status are 12 times more profitable.

That’s why a recent survey entitled Feeling the Love From the Loyalty Club published by the Chief Marketing Officer (CMO) Council should be required reading for every hospitality marketing professional.  According to the survey:

Both customers and marketers agree: deeper engagement and personalized content drive loyalty – not mass blast communications and gimmicks.

This shouldn’t come as any surprise. In The Seven Deadly Sins of Email Marketing for Luxury Hotels published over two years ago “failing to personalize and segment your message” and “accepting an Email Blast mentality” were two of the seven sins.

Need to Personalize

Today’s traveler is far more sophisticated than ever before. And they want your messages to be personalized. According to the CMO survey:

• 58% of consumers surveyed want more compelling and personal benefits and services
• 52% want more compelling personal deals and offers

Hospitality marketing professionals dedicated to delivering personalized communications with relevant offers and content will be the Loyalty Leaders. “Relevant” information is what guests want to hear – not the incessant sales pitches far too many (desperate) hoteliers deliver.

Too Much SPAM

Again, according to the survey, the biggest negative guests associate with loyalty programs is the amount of SPAM they receive. I doubt many hoteliers view their email messages as SPAM, but the truth is oftentimes it is.  In fact 44% of respondents complained they were getting too much SPAM or junk email.

When a guest gives you their email address it is not a license to constantly “blast” them with irrelevant messages designed almost exclusively with the hotel’s own self interest in mind – sell rooms. Loyalty is about relationships not transactions.

Give your guests more credit. They can tell when a hotel is romancing them and genuinely interested in deepening the relationship and when a hotel is just trying to get them to open their wallet. (FYI – this is the #1 Deadly Sin.)

So what’s the secret to building a larger and more loyal customer base?  Simple:

• Develop a customer centric communications strategy.  Treat people as individuals
• Personalize your communications and talk to guests on a one to one basis
• Don’t over communicate. Remove “email blast” from your marketing lexicon
• Surprise and delight loyal customers with perks, rewards and value-adds
• Seriously consider using an outside communications firm with direct marketing specialists on staff who know how to:
  • Segment your database
  • Develop relevant content and compelling offers
  • Nurture and deepen the relationship over time

Hospitality marketing professionals looking to increase customer loyalty need to follow the golden rule – treat each guest the way you want to be treated.  That means giving them what they want in a relationship

What do you think?  Safe travels – Madigan Pratt

As promised – here’s the Nisbet Plantation Case Study that Jamie Holmes and I presented at the Caribbean Hotel and Tourism Association meeting in St. Thomas last month.

It’s good news that proves you can market your way around a recession.

Here’s what Nisbet Plantation Beach Club, an intimate luxury resort in the Caribbean, did to outperform other hotels in the region. As a result of following best practices and adhering to customer relationship marketing, Nisbet is also well positioned to flourish as the recession subsides.

You can download the complete article here.  Here’s a top-line summary.

• Focus on Marketing Basics – A recession is not the time to experiment – especially if you have a very limited marketing budget. Make sure your 4-P’s of Marketing – Product, Place, Price and Promotion – are performing perfectly. Experiment only if there are any opportunistic funds left in your budget.

• Don’t Deep Discount – Study after study show deep discounting is easily copied, doesn’t stimulate demand and hurts RevPAR over the short term.Long term revenue also suffers. STR estimates it will take between five to ten years for hotels to return to pre-recession pricing once inflation is factored in. Used to cheap rates, the trade and consumers will resist your attempts to raise them.

• Deliver a Great Guest Experience/Provide Value – Hotels need to cut expenses, but caution needs to be taken to cut those that will least impact the overall guest experience.Cutting staff to skeleton crews, draining the pool, closing the spa and shuttering restaurants are not what a guest expects. And most likely their displeasure will be shared with others on TripAdvisor.

• Maintain Marketing Spending – Hospitality marketing budgets are always easy targets for budget reductions in recessionary times. It is the tool that will help convince potential guests that your hotel is better than competition, provides good value and is certainly worth a few more dollars a night than the other hotels that are using Price as their primary marketing tool.McGraw-Hill did a study of companies during the last Great Recession of 1981-82 and found that those who maintained or increased advertising spending outperformed competition during the recession and recovered more quickly than those who cut spending.

Click here for the complete Nisbet Plantation Hotel Case Study.

Safe Travels – Madigan Pratt

Last week’s post, “The Media Are Killing Us,” talked about how biased and sensationalized news reports on organizations conducting conferences hurts resorts and hotels.  This week I would like to focus on the human suffering it is causing.

Do you think reporters, so eager to create (even fabricate) “news,” ever think about the damage and human suffering their stories cause?  Probably not.

It seems appropriate to focus on it now that The St. Regis Monarch Beach Resort (scene of the infamous AIG Conference) has been turned over to Citigroup and ABC News’ story about the Social Security Administration’s recent Phoenix conference which now has Congress questioning whether it was prudent to hold the conference.

As a result of last week’s post, I received numerous emails from hospitality marketing professionals thanking me for speaking out.  One email stood out from all the rest.

It was from a meeting manager in Phoenix and started out -

“As an Independent On Site Meeting Manager for over 12 years I wanted to say thank you for your comment [on the ABC News story].  I have also been very active in signing petitions, writing Senators and informing others through every means possible.

I am currently in search of a permanent position as I can no longer support myself as a freelancer in this industry.”

Over the course of several email correspondences I learned she was very willing to relocate and in fact, recently had a telephone interview with a company in Charlotte, NC.  She was one of 650 applicants for the position and one of only 16 to be interviewed.  She wrote:

“I was not selected for a face-to-face interview but have been told they will be hiring more people for the position in the beginning of the year and they will consider me then.  I don’t think I can hold out.  Getting a job is like winning the lottery.”

Meetings Mean Business – they are directly responsible for more than 1 million jobs!  They benefit the companies conducting them, the hotels and resorts where they are held, and every individual involved in the planning and execution.  With unemployment expected to rise to over 10% this year, jobs are critically important.  Someone should tell Congress!

So get involved.  Speak out.  Express your outrage at how media is demonizing legitimate business meetings and events, and making it difficult if not impossible to find good paying jobs.

And by the way – if you have a job opening for a senior meeting planner, please send me an email at Madigan@MadiganPratt.com and I will forward it on to a real pro looking to hit the lottery.  Hopefully I can do one more story on this topic – one with a happy ending.

What do you think?  Leave a comment.  Safe travels – Madigan Pratt

The Social Security Administration recently held its first conference since 2001 which included 700 attendees at the Arizona Biltmore in Phoenix.   Perhaps you heard about it because of the brouhaha raised by ABC News when they offered a totally unflattering report. If not, you can read and see it here.

Just in case you think the media is unbiased, let it be known the ABC Report was filled with a full array of half truths intended to sensationalize the conference and embarrass the SSA.  In the process it is perpetuating the AIG effect that is devastating the meetings and conventions business, slashing revenues at resort hotels and causing lay offs of thousands of dedicated workers.  Shame on you ABC!

Here’s a few examples of what ABC reported and the truth of what went on:

• ABC Reported -  The SSA spent $700,000 for 700 people to attend a three day conference.  What they didn’t say was the SSA shopped around for the best price and was able to secure a room rate of $85 per night.  What would you expect for Phoenix in the summer?  They got a great deal!
• ABC Reported – Some of the government managers brought along relatives.  Imagine that! Husbands and wives going to a conference with their spouses.  Now that’s real news.
• ABC reported – There was a night excursion to a local casino.  What they didn’t say was SSA employees (and not the government) have to pick up their own entertainment expenses including trips to casinos.
• ABC reported – The conference included a performance by a motivational dance company. Isn’t increasing employee motivation and thus performance one reasons to have a conference?   What ABC didn’t say was most attendees sit in windowless conference rooms from 8m to 6pm.
• ABC interviewed someone from the watchdog Citizens Against Government Waste group who scoffed at  SSA claims the conference was put on as inexpensively as possible.  They claimed if the SSA wanted to do that it would have held a video conference!  I like what Steve Moore, president of the Greater Phoenix CVB had to say about that – “What’s next?  Thanksgiving online?”

Phoenix is a city with many resort hotels that have been hard hit by the current recession and huge drop off in meeting and convention business.  Several hotels have gone bankrupt and others are on the verge.

Biased and sensationalized reports like this are hurting every hotel and resort that receives even a tiny portion of their revenue from meetings and conventions.  In some cases reports like this are killing resorts and increasing unemployment.

If you are as incensed as I am about the way the media is piling on and demonizing meetings and conventions I encourage you to speak out.  Let the media know “Meetings Mean Business.”  They also mean jobs to a lot of low income individuals who really do need a job right now.

Leave a comment.  Let others know what you think.  Forward this link to others in the industry.  If you’re a blogger speak out!

Safe travels – Madigan Pratt

What is the most appropriate tone to deliver in your advertising and marketing messages during this great recession?

Adweek Magazine was determined to find out.  It surveyed nearly 1,500 advertising and marketing members of LinkedIn – the professional social network.  The overwhelming answer – Value.

In fact, when offered a list of five choices the majority of marketers said “It’s the Value, Stupid.”  Well, maybe not in those exact words, but 52% did say communications should “focus on value.”  Hospitality marketers should note only 8% of executives thought marketers should “focus on price” – the lowest rated of all five choices.

Here’s how the voting went -

Now, one would assume hospitality marketing professionals would know value is the message, but you wouldn’t know that based on a number of hotel email messages we have monitored recently.  Here are some sample headlines:

• Receive a $400 Credit for a Four Night Stay
• $70.00 Off Our Sunday Champagne Brunch Package
• Arizona Vacation: Breakfast + Golf from $159
• South Carolina – Hilton Head  $87 – $167

Looks as though quite a few hotels may need to rethink their marketing communications messages (if not their advertising agencies).

One smart hotel that understands “It’s The Value, Stupid” is 9 Beaches in Bermuda.  Bam!  The first thing you read on their web site is – “9 Beaches – Bermuda’s Best Resort Value.”  Copy then goes on to offer prospective travelers permission to believe it is indeed Bermuda’s Best Resort Value.

A hotel chain that “get’s it” is Courtyard by Marriott.  Over the weekend they ran a series of TV commercials which all have “Value” as its main message.  Nice.

What do you think?  Few hotels will be able to get through this recession without some discounting.  But do you feel hotels are focusing too much on price as opposed to communicating the value travelers will receive at their hotel?

Safe travels – Madigan Pratt.

The Internet serves as the foundation for most luxury hotel marketing programs today.  It’s used to launch relationship building emails and send tactical offers.  Press releases must pass search engine optimization tests and advertising, promotional and linking opportunities abound.

At the center of all this Internet activity is the hotel’s own web site.  So it’s not surprising in today’s economic environment hospitality marketing professionals are keenly focused on finding cost effective ways to increase quality traffic to their site.

A good way to do this is through banner advertising, right?  Not according to a recent study conducted by Opinion Research for ARAnet Adfusion.

Of the five different marketing formats measured in the survey, the two most effective ways to get Internet users to take action (click through to your site) are having your brand included in an online article (51%) and providing them with an email offer (47%).

Banners ads are less than half as effective in delivering visitors to your site as being mentioned in an article.  So it makes sense – to increase web traffic you should stop advertising.

So rev up your public relations and beef up your online direct marketing capabilities and start driving more traffic to your web site.

And if you really want to supercharge your PR and DM efforts make sure they are integrated into a comprehensive customer relationship marketing (CRM) program.

One last thought – think of each TripAdvisor review as an online article mention and you’ll see why having a comprehensive TripAdvisor strategy is so important.  Need help?  Contact me.

What do you think?  Safe travels – Madigan Pratt

That is one of the conclusions hospitality marketing professionals took away from a recent presentation by Peter Yesawich at a hospitality marketing conference last weekend at The Homestead in Hot Springs, Virginia.

But don’t despair.  There is still hope for some hoteliers.

Peter was presenting the 2008 Y Partnership/Yankelovich Monitor research when he showed a chart indicating “Airline Brands” no longer matters to 51% of leisure travelers – an all-time low.   That’s down from 57% in 2006 and expected to crash below 50% for the first time when 2009 study results are published.

Why?  Lack of differentiation, increasing price sensitivity on the part of travelers and the introduction of comparison shopping web sites like Kayak and SideStep.  The industry that pioneered loyalty programs is becoming a commodity – much to the chagrin of the airlines, their marketing departments and ad agencies.  Brand differentiation and loyalty are declining rapidly.

The same forces are at work against chain hotels as they too are becoming commodities.   With increasing “sameness” the chains will be left to compete primarily on price.  Anybody see Hilton’s announcement on Monday saying they were reducing the price on all rooms by 20%?

Now For The Good News!

There is a silver lining in this story and it pertains to smaller independent luxury hotels – those hotels that offer guests a truly unique experience – an experience discerning travelers are willing to pay a premium for.  These are the hotels that can effectively resist  becoming a commodity.

But it is only an advantage if you capitalize on it.  You can by developing a strong, benefit oriented positioning and do everything in your power to continually strengthen your brand.  Make sure your hospitality marketing team understands your brand and communicates it effectively across all messaging.  Create an integrated customer relationship marketing (CRM) program and nurture your guests and prospects through communications the same way you do on property.

Create Brand Advocates.  Nurture every guest before, during and after their stay. 

Small independent luxury hotels have never been in a better position to compete against the chains.  Take advantage of it while you can.

What do you think?  Safe Travels – Madigan Pratt

Here’s some interesting information you can use to achieve a better ROI on your Internet marketing efforts.  It comes compliments of MarketingSherpa and ad:tech.  Their 2008 year-end survey of more than 1,200 marketers was designed to identify the most effective Internet based marketing tools. Beyond being the most effective, the study wanted to determine which tools produced the greatest ROI.

The chart below shows the various tactics marketers use and were covered in the study.  The usage axis shows the percentage of marketers using the tactic with the horizontal axis showing the percentage of marketers reporting great return on investment.  The size of the circle represents the relative budget compared to other tactics.

“Paid Search” (big blue circle) is a winner with about 50% of marketers surveyed saying it produces great ROI.  In second place is “House Email” (small orange circle) with about 45% indicating it produces great ROI.  In third place at around 40% is search engine optimization (SEO – even smaller purple circle).

Note however the difference in the size of the circles.  “Paid Search” is significantly bigger than either “House Email” or “SEO.”  As the report points out:

“The relative size of the circles means the tactic [House Email and SEO] requires far less budget than “Paid Search.”

Conclusion:  If you’re dealing with a hospitality marketing budget smaller than you need (and who isn’t?), make sure you are maximizing your house list email marketing efforts and SEO before branching out into paid search.

FYI – if you want to get the most out of your email marketing program be sure to avoid The 7 Deadly Sins of Email Marketing For Luxury Hotels.

What do you think?  Safe travels – Madigan Pratt

Companies need to change strategies as the economy changes from good times to bad.  This message was brought home when I read a White Paper from my friends at Peppers & Rogers Group.  The paper had a great chart highlighting the shifts companies need to make

As the economy expands businesses should focus more on acquiring new customers.  And as it moves into a downturn, where it is today, companies should be focusing more on servicing and growing their existing customers.

With budgets tight and research showing it costs 6-10 times more to attract a new customer than retain an existing one hospitality marketing professionals need to focus more on their current customer base – making them feel like VIP’s and inviting them back.

Hotels most successful at re-attracting past guests share common marketing philosophies.  They:

• Focus on capturing correct/complete contact data at registration
• Keep that information up-to-date with regular NCOA
• Understand the lifetime value of each guest
• Follow a strategic vs. a tactical approach to marketing
• Embrace Customer Relationship Marketing (CRM)
• Actively promote both offline and online word-of-mouth advertising
• Understand and employ direct marketing best practices

You’ll find plenty of customer retention ideas on the Hospitality Marketing Blog.  I’m sure other readers would love to hear your ideas.  Please feel free to share – add a comment.

Safe travels – Madigan Pratt

The article “Marketing to Succeed in Difficult Economic Times” mentions how Wharton Professors recommend increasing advertising to build share and revenue in recessionary times. (see previous post)

Walmart is obviously a believer in this strategy.  According to AdAge Magazine:

“The retail behemoth, long known for its penny-pinching prowess, has gone on a massive media-spending spree in the past year, hiking measured media outlays some $300 million while much of the market pulled back.”

This is obviously an extreme example, but shows how aggressively one marketer is approaching this recession.  But is it working?

Let’s see.  The fourth quarter of 2008 was one of the worst for the retail industry in over 20 years with many companies experiencing double-digit declines.  Walmart, on the other hand, has seen same-store-sales grow in recent months by 2% to 3%.

It’s not easy being in hospitality marketing these days.  The need to reduce spending is omnipresent – but, if you’re thinking of cutting back on your marketing budget, you might want to think again.  Consider listening the professors at Wharton or following the example of Walmart and be a much more aggressive advertiser.

The Wharton profs also point out the more aggressive marketers in the severe 1981-82 recession fared much better during the recession, but also emerged from it much quicker than their timid competitors.

What do you think?  Safe Travels – Madigan Pratt