Mr. King

Sales & Marketing

Enhancing Direct Marketing Relevance Throughout the Customer Lifecycle (Part I)

By Robert King, General Manager, Travel & Hospitality, ClickSquared

Travel and hospitality direct marketers understand that the key to improving the efficiency of communications is through improving relevance. Virtually all would agree that the goal is to deliver the right message to the right audience at the right time and, with increasing importance, through the right channel. Based on prevailing marketing practices, however, this seems to be much easier said than done.

A sound communications strategy begins with a keen understanding of the hospitality customer lifecycle. While there can be many permutations, a basic model is presented below in Figure A. At any point in time, a hotel has customers arrayed across each stage of the lifecycle. To complicate matters more, a single customer moves across the lifecycle over time. Once this is understood, it is easy to recognize the fallacy in a “one size fits all” communications approach.

By strategically examining the hospitality customer lifecycle from a direct marketer’s perspective, it will be easy to appreciate the virtually limitless opportunities you have available to enhance the relevance of your marketing communications. Savvy travel and hospitality marketers can maximize engagement with customers by creating a cross-channel marketing program that is RELEVANT to each guest -- no matter where they are in that lifecycle.

In this article, we’ll limit the discussion to critical lifecycle stages that occur before your customer arrives on your property – and some of the best practices applicable to each.

Welcome/On-Boarding

You only get one chance to make a good first impression. Email statistics demonstrate that a customer is most likely to open the first one or two communications from any sender, and that the relevance of these early interactions sets the stage for subsequent engagement levels. As a result, it is imperative to make the most of welcome and on-boarding communications.

“Welcoming” is second nature in hospitality…after all, it’s our business. Welcome messages range from a thank you for signing up for our email newsletter, for joining our loyalty program, for inquiring about a possible visit, or for completing your first stay. Whatever the event that allowed you to capture a guest’s contact information, you need to say “thank you” and offer a warm welcome.

“On-boarding” doesn’t come so easy. Often, on-boarding is nothing more than a well-intentioned but over-zealous effort by marketers to send out the next “special offer” - the same special offer that simultaneously goes to every other contactable person in the database. Too often, on-boarding efforts of this type are actually the first stepping-stone toward customer disengagement.

On-boarding should be thought of as the peak time of customer receptiveness. It is our chance to ask, listen and learn about an individual’s interests and preferences in order to make future communications more relevant. Does he normally travel as a couple, family or solo? What activities does she enjoy? Is there a time of year he likes to travel? Is there a part of the country (or world) she wants to explore? Does he normally travel for business or leisure? What would she like to hear about? How often? Does he prefer email, direct mail, or mobile communications?

Begin capturing customer interests and preferences by inviting (directing) them to a well-designed guest preference center or profile page. Once you collect these explicit customer preferences, marry them with the implicit preferences you glean from the customer’s demonstrated activity and behavior, or others like them, that you’re already tracking in your customer database. Which emails did she open? Which links did he click? When did she book? Where is he staying? When is she traveling? In aggregate, this information can be translated into a holistic understanding of each customer’s interests and preferences. In turn, this will enable you to optimally deliver content that is most relevant, and do so at the times and frequency that are most appropriate.

Reservation Confirmation.

Confirming Your Reservation. It’s now time for the first “transactional” message resulting from a customer’s stay. These communications have traditionally looked more like a receipt, simply listing the key reservation data – name, property, arrival and departure dates, price, and a confirmation number. Quite often, a generic reservation confirmation is initiated by the property management system, and is too often beyond marketing’s reach. However, as marketing platforms evolve to accept real-time transactional messages, hotels are recognizing that even these heretofore mundane communications can be enriched with relevant, personalized content based on customer insights maintained in the marketing database.

Transactional communications (such as a reservation confirmation, pre-stay email or cancellation confirmation) have some of the highest open rates of all email correspondence. Significantly, they are sent regardless whether a customer has “opted-in” to receive marketing communications. Done correctly, these transactional communications can and should be enriched with marketing content. And, if the customer is not already opted-in to receive marketing communications, an invitation to do so should be a prominent feature of every transactional email. If the customer is not already a loyalty member, a reservation confirmation is a prime opportunity to piggy-back a loyalty program invitation. And of course, these messages offer an opportunity to showcase other services or hotel features, and can be dynamically personalized based on what you already know about that customer or his upcoming stay.

Pre-Arrival Messaging

We’re looking forward to your visit. You’ve sent the confirmation email. Now what? First and foremost, quit selling and start engaging. Continuing to send out repeated offers simply reinforces the fact that you don’t recognize that this customer has already made a reservation. Rather, the pre-arrival stage of the lifecycle has two primary communication objectives :(1) Keep the guest engaged with the reserved stay, and (2) help to enhance the stay experience.

For most hotels and resorts, cancellation rates are in the double digits, representing a substantial amount of lost revenue. Not only do you lose the revenue from the cancellation, but when inventory is freed late in the booking cycle, the ability to re-book that inventory is limited. Not surprisingly, statistics indicate that cancellation rates increase as the booking window (i.e., the time between reservation and arrival) expands. Granted, some cancellations are often unavoidable. However, many booking cancellations – particularly leisure bookings – can be the result of guest disengagement. A guest simply loses the motivation that prompted them to make the reservation in the first place. Does your pre-arrival communication strategy differentiate between guests who book 60 to 90 days in advance, versus those who book 15 days out? If not, there might be a lot of silence between the reservation confirmation and the basic pre-arrival message delivery five days or so before arrival. As such, you may be missing a key opportunity to reinforce or re-create the excitement and allure of the upcoming visit, and prevent a cancellation rooted in disengagement. One experiential leisure destination found that implementing a multi-touch pre-arrival communication stream focused on building anticipation and excitement about the upcoming visit generated their highest marketing ROI. Do the math; it doesn’t take many avoided cancellations to justify developing a tailored, multi-touch pre-arrival communication stream for extended advance bookings.

In addition to maintaining guest engagement, the pre-arrival period is an excellent opportunity to begin enhancing the upcoming stay. Is the guest aware of your concierge services that can help them plan their activities? What about special events or attractions that coincide with their visit and may warrant advance planning? How about tee times or spa appointments? Limo service from the airport? If your upcoming guest isn’t already a loyalty program member, remind them of the benefits of joining prior to this stay. The communication just prior to arrival can offer weather and driving directions. By reaching out to the guest in a manner designed to help them make the most of their stay -- based on their personal interests and preferences rather than what you’d like to (up)sell her -- you are helping to prepare the way for a memorable guest experience.

Cancellation Messaging

Sorry you won’t be staying with us. OK, despite your best efforts to maintain engagement, the guest had to cancel. This, too, affords opportunities that many hospitality marketers overlook.

Does your cancellation confirmation include an invitation to book another stay, including a seamless link to the booking engine, or the call center’s number? How about brand-reinforcing messaging or invitations to an upcoming event that might prompt someone to book a future stay while still “warm” to your property?

Furthermore, don’t overlook the value of a cancelled reservation. Even though this reservation was not “consumed”, it provides important information that should be added to your marketing database. It likely reveals property type and location tendencies, solo or accompanied travel norms, type of room preference, and specific interests (for example, if the cancelled stay coincided with a conference, special event or included a specific activity). These insights can be helpful in making future communications to that customer more relevant, particularly for first time or low stay frequency guests for whom previous guest history is scarce or non-existent.

In Closing

Building your direct marketing strategy around the hospitality customer lifecycle is the key to improving the relevance of your communications. These best practices, tailored to your brand, will enhance guest engagement and, in turn, your marketing return on investment. As discussed above, there are plenty of opportunities to maintain and enhance guest engagement long before she arrives on property. In the second part of this article to be published May 8 in the Hotel Business Review, I’ll explore best practices around other key stages of the hospitality customer lifecycle. Stay tuned.

With more than 20 years of experience in the travel and hospitality industry, Robert King has held marketing, sales and senior management positions at a variety of organizations. Mr. King works with ClickSquared clients throughout North America, Asia and Europe to develop and implement highly targeted, timely, interactive customer relationship programs that result in increased ROI. Mr. King can be contacted at 480-603-9403 or bking@clicksquared.com Extended Bio...

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