Ms. Knutson

Sales & Marketing

Is Your Hotel Sailing the Seven “Cs”?

By Bonnie Knutson, Professor, The School of Hospitality Business/MSU

More than a decade ago, the American writer, George William Curtis (1824-1892), was prophetic when he said: “It is not the ship so much as the skillful sailing that assures the prosperous voyage.” Little did he know that in 2011, his comments would hit the lodging industry head on. In these turbulent economic seas, when consumers reduce spending, new guests are harder to recruit, and operational costs are rising, hoteliers face unprecedented challenges today and uncertainty tomorrow. (Are you having fun yet?) If you feel like you are shooting the rapids in a rubber raft, you are not alone. There are a lot of properties in the same type of raft. But is it too easy to be hypnotized by all the hazards in the water, to the threat of capsizing your hotel’s ship? The short answer is yes. As I read once, “If you focus on the rocks, that’s where you will go...[instead] look for and steer to the high water and paddle like a fiend.” (Yeah, I know, this is easier said than done.)

To find that high water, owners and managers alike have to remember that the goal of any business is thriving, not just surviving. And the means by which it survives is to invest in “C-worthy” marketing instead of waiting for a change in market wind conditions. As contrary as this may sound, it is a time-worn strategy that is supported by a variety of studies showing that organizations who maintain or increase their marketing activities in down times average significantly higher revenues during the recession and recovery period than those who did not.

So just what are these C-worthy strategies that can steer your hotel on that prosperous voyage? There are seven of them that will allow you to paddle like a fiend. So grab your two oars and start rowing.

1. Cost

Over the past decade or so, there has been a fundamental shift in how consumers define the cost of buying. It used to be that cost meant dollars, but in today’s highly paced societies, cost is also measured in terms of time. Or as a popular axiom says, Time is money. So here is where another “C” enters the equation – convenience. How can you make it easier for your guests to spend time and money with you? It may mean thinking outside the proverbial business box to partner with area businesses to offer additional services that compliment what your hotel offers. It may also mean making it easier for guests to help support a charitable organization for people who may be experiencing challenges – i.e. sending cards or care packages to service men and women serving overseas. In other words, look for ways in which you can position your business as a “go-to” concierge convenience center for customers.

2. Customization

George Orwell’s 1984 is here. In this digital age, people are becoming digitized. We are known by our numbers – social security, credit cards, frequency programs, phone, fax, and mobile, ad infinitum. Help! Stop the world, I want to get off! I am not a number; I am a person, I am me! I want to be treated as an individual. As Ol’ Blue Eyes (for those of us who are old enough to remember Frank Sinatra) would have crooned, “I’ll have it my way.” But having it my way goes far beyond making sure employees greet each customer warmly. Customization simply means altering something in order to make it fit somebody’s requirements better. It means personalizing. It means adding little touches that say “you are a special.” An example: In your restaurant, birthday desserts could be served on Waechtersbach’s You are Special Today cherry red plate or served on a rimmed dinner plate with the celebrant’s name written in chocolate script around the rim.

3. Connectivity

It’s no secret that customer retention is at the heart of every business’s marketing efforts. When customers begin tightening their belts and re-evaluating every dollar they spend, smart businesses remember the 80-20 rule: 80% of your business’s business generally comes from 20% of your customers. So invest your energies in strengthening the connection with your best guests. What I’m about to advocate may sound like heresy to you, but it is the truth. Segment your customers into three groups: Gold, Silver, and “Hit-the-ball-drag-Harry”. For your Gold customers, divert more attention to them. Jump through hoops for them. Design unique services for them. And use customized communication frequently. These are the customers that will stick with your hotel and help you paddle through the turbulent economic waters. For your Silver customers, maintain what you are doing but also try to develop niche products, programs or services that can move them into the Gold category. These are the customers who need an extra oar to help you paddle. And then there are the Harrys that every hotel has. These generally are those who, in addition to complaining about anything and everything, spend very little money with you, and want you to reduce commissions and/or prices. Naturally, you have to offer them your traditional hospitality, but don’t waste your valuable resources trying to get them to paddle.

4. Creativity

There is a Broadway choreographer who, when given a new show to choreograph, puts all the notes, steps, and dances she used in previous productions in a box. These past works then become off limits, cuing her to literally think out of the box. While this may seem a little corny, it is her cue to fight the tendency we all have to replicate what we did in the past. There is a certain value in tradition and heritage, but the reality of today’s consumers is that they have a passion for things that are new and different; that are innovative – in programs, services, and special promotions. This doesn’t mean that you throw out everything the hotel has done in the past, but it does mean that you need to take a good look as what was done and figure out how to give it a contemporary twist. What about integrating an April 15th Tax Day (think Monopoly) to your roster of special promotions? Or in this chaotic world where parents have little time along together, you might be able to reposition a couple’s night-out as a come back to romance evening. Even spa services might take on a whole new value if they are touted as a to your health (or sanity) offering. The list is endless.

5. Community

Every consumer survey I’ve seen finds that a big reason consumers stay customers is a sense of community; i.e. a sense of belonging built around others who share common interests and values. This is a golden opportunity for you because the whole notion of community is in flux. It used to be that we defined our community in terms of where we lived, where we worked, or where our children when to school. It was geographic in nature. But today, communities can be virtual; we can connect through the Internet and have more in common with someone living in India than the person next door. Yet, interaction at the in-person level is a basic human need. So the more you can do to foster the sense of a human community the more it becomes positioned as the guest’s home away from home. Futurist Alvin Toffler coined the phrase High tech-High touch meaning that, the more technology invades and controls our lives, the more we need human interaction. Innovatively strengthening your hotel’s human community is a sure way of paddling towards that thriving shore.

6. Compelling

All consumers want a compelling experience; younger ones need it. At every touch point, your property’s experience must have a powerful and irresistible effect. And such experiences are contagious; it is what makes advertisers and recruiters out of your guests. But what is a compelling experience and how do you deliver it? I can’t answer that question for you. Only your guests can – through focus groups, one-on-one interviews, blogs, tweets, Facebook, comments cards, and surveys. But please don’t just do one of those “Are you satisfied…” surveys! Satisfaction doesn’t equal compelling experience; satisfaction doesn’t cut it any more. Studies indicate that 85% of people who say they are satisfied will walk away to your competitor – spending their time and money there. In addition to more traditional research, you can also have recognizant missions. Send employees on a mystery shopping excursion to competitive properties to evaluate the compelling quotient of the experience. I guarantee that if they are doing things better, that’s where your guests will be going.

7. Change

To say that there has been a lot of turbulence in the every industry over the past decade is an understatement. In fact, turbulence is the new normality, according to famed marketing guru, Philip Kotler. The key to guiding your ship through these waters comes from hoisting three sails. First, make sure your radar is up and working to monitor what is going on that can affect your marketing– demographic, social, economic, technological, and political. Second, rather than developing just one plan, imagine several possible future scenarios and develop a plan for each. This is playing the “what if” game and helps keep you from being caught off guard by unexpected changes. Finally, remember that alert leaders can find opportunities in turbulent waters, not just danger. As Kotler would say, alert marketers understand that consumers change their needs and preferences during economically challenging times. But, everyone will still spend money, and even splurge on something. The key will be for you to move in the same direction as your consumers by re-valuing your services and revising the promotional messages you send.

When the winds of this current economic storm started really blowing in 2008, everyone was asking how long will it last? When will it end? How rough will it be? No one knew because we are in uncharted economic waters. Some even believe that a 9% unemployment rate will be the new norm. All we do know is that this storm is not just going to blow over; we have to paddle through it and ride it out. And when the skies clear, which they will, the landscape of the every industry will be different. Call me an optimist, but I firmly believe that the best days of the lodging industry are ahead of us. We have an opportunity to chart that future by designing innovative ways of thriving not just surviving. The greatest rewards will go to those who develop new business models, generate new ideas, and find new sources of revenue based on changing technology, demographics, and consumer values. So I end this article by paraphrasing three famous three questions:

• Is yours a hotel that makes things happen?
  
• Is yours a hotel that watches things happen?
  
• Is yours a hotel that wonders what has happened?
  

“To reach a port we must sail, sometimes with the wind, and sometimes against it. But we must not drift or lie at anchor.” (author unknown) Sail on!

Your bottom line will thank you.

Bonnie J. Knutson is a professor in The School of Hospitality Business in the Broad College of Business at Michigan State University. She is an authority on emerging lifestyle trends and innovative marketing. Her work has been featured in The Wall Street Journal, USA Today, and on PBS and CNN. She has had numerous articles in industry, business, and academic publications. Bonnie is a frequent speaker for executive education as well as business and industry meetings, workshops, and seminars. Dr. Knutson is also editor of the Journal of Hospitality & Leisure Marketing. Ms. Knutson can be contacted at 517-353-9211 or drbonnie@msu.edu Extended Bio...

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