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

Many readers have ask which Hospitality Marketing Blog posts were the most widely read in 2009.  So, by popular request, here is a list of the Magnificent Seven.  Please enjoy the practical advice and marketing insights as you gear up for 2010.

1. Hotel Case Study – Prospering in difficult Times – Good news was hard to come by in hospitality marketing circles in 2009.  Here’s a story about a small luxury hotel on an island difficult to get to that offers inspiration and hope.  Very worthwhile.
2. 85% of Hoteliers Just Don’t Get It – Back in August I reported on a Market Metrics’ Research Report that found only 15% of hotels have policies or guidelines for how to manage user-generated reviews (aka TripAdvisor).  Can you imagine that?
3. The Media Are Killing Us – The most overused hospitality phrase for 2009 may well be (unfortunately) “The AIG Effect.”  One bad move by a major government bailout recipient created a media frenzy followed by a Congressional dog pile that literally destroyed the meetings and conventions business.  Government was trying to create jobs on one hand while simultaneously throwing tens of thousands of loyal hospitality employees out of work.  Go figure!
4. Are All Hoteliers Liars? – I like this one too.  Oyster.com, a new online hotel review site launched in July and called hoteliers and hospitality marketing professionals liars.  It sure created headlines, but couldn’t save a failed business plan.  They ended up letting most of their staff go some six months later – read No Pearl in this Oyster.  Just rewards.
5. Thinking Beyond Hospitality – Many found this story about John Wallis, Head of Marketing and Brand Strategy for Hyatt eye-opening.  His goal – to become a database driven company that’s in the hotel business. Revolutionary in hospitality marketing?  Yes, but it shouldn’t be.
6. Why I Hate TripAdvisor Sometimes – You gotta have fun when you can and it’s not often you have a chance to poke TripAdvisor in the eye.  Here’s what makes me mad about TripAdvisor – sometimes.
7. Marketing To Succeed In Difficult Times – A practical guide of proven strategies that have helped companies survive and even excel in past recessions.  Written back in February, 2009 there is still some good advice to help 2010 planning.

Thank you for reading and commenting on Hospitality Marketing Blog.  It has been a real pleasure for me to publish this blog and I look forward to continuing into 2010 and beyond.

Wishing you a very Happy, Healthy and Prosperous New Year.

Safe Travels – Madigan Pratt

PS – if you would like to receive a short email whenever a new article is posted simply subscribe on the right.

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

An article in today’s New York Times details how magazines are suffering as a result of a collapse in luxury spending.

• While the year started out well, the bottom fell out in October.  According to MasterCard’s SpendingPulse, luxury spending dropped 20.1 percent in October alone.

• More than half of affluent consumers have cut their spending on luxury products compared with a year ago, according to a study by Unity Marketing.

• Ad pages at the top luxury magazines fell 22 percent year over year for the December issues, according to Media Industry Newsletter.

As an owner of a small luxury hotel what can you take away from the article?

• You already know it is rough out there.
• While not placing large ad budgets in Conde Nast Traveler you should know most media will offer steep discounts – if you are a good negotiator.
• While magazines rates will certainly drop, concentrate your marketing in media that will produce the greatest ROI.  Focus on your best customers and prospects.  Expand email and direct marketing relationship building programs.  Keep your web site current and optimized and your database in good shape.

We specialize in customer relationship marketing, so if you have a question, contact me (see About Us).  Safe Travels – Madigan Pratt

An article in today’s New York Times details how magazines are suffering as a result of a collapse in luxury spending.

• While the year started out well, the bottom fell out in October.  According to MasterCard’s SpendingPulse, luxury spending dropped 20.1 percent in October alone.

• More than half of affluent consumers have cut their spending on luxury products compared with a year ago, according to a study by Unity Marketing.

• Ad pages at the top luxury magazines fell 22 percent year over year for the December issues, according to Media Industry Newsletter.

As an owner of a small luxury hotel what can you take away from the article?

• You already know it is rough out there.
• While not placing large ad budgets in Conde Nast Traveler you should know most media will offer steep discounts – if you are a good negotiator.
• While magazines rates will certainly drop, concentrate your marketing in media that will produce the greatest ROI.  Focus on your best customers and prospects.  Expand email and direct marketing relationship building programs.  Keep your web site current and optimized and your database in good shape.

We specialize in customer relationship marketing, so if you have a question, contact me (see About Us).  Safe Travels – Madigan Pratt

A recent Email Research Study by Q Interactive and MarketingSherpa found consumers have a decidedly different definition of SPAM than the direct marketing industry. 

As a result consumers are sometimes too quick to hit the “Report Spam” button instead of “Unsubscribe” when they no longer wish to receive a company’s email.  This can have dire consequences for a small luxury hotel looking to stay use email to build relationships with guests and prospects.

The industry defines spam as unsolicited commercial email.  It seems consumers believe it is any email they now find annoying or no longer wish to receive.

The problem arises since ISPs and email ASPs monitor SPAM reports and can stop a company from sending email it too many are received.  Spam reports can effectively shut down a hotel’s email marketing effort.

What’s a small luxury hotelier to do? Here are a few ideas:

• First, your sign-up must be double opt-in
• Avoid using outside email lists
• Monitor Spam reports
• Provide readers with relevant information
• Don’t email too often
• Remind people they are receiving your email beacuse they requested it
• Offer an “unsubscribe” option at the top of your email

Anyone care to add to this list?  Safe Travels – Madigan Pratt

MailerMailer an email list management company recently published its “E-Mail Marketing Metrics Report” covering July – December 2007.

It reported worldwide email open rates slipped significantly between the first and second half of 2007 even for those including personalization.  This of course includes rented lists.

Our small luxury hotels always follow best practices and use a double opt-in sign-up process to build their email databases.  While this can present problems – we can’t automatically sign guests up – it does pays off. 

Open and click-through rates for their relationship building email newsletters run 5-20 times higher than the figures reported by MailerMailer.  It pays to use a double opt-in process.

What is your experience?  Safe travels – Madigan Pratt

PS – See earlier article: “Double Opt-In or Don’t Bother”