Have You Met HENRY Yet?
How to Use Acronyms in Your Hotel's Sales and Marketing Strategy
By Bonnie Knutson Professor, The School of Hospitality Business/MSU | January 01, 2017
Acronyms are labels. They are sometimes thought of as a lazy marketer's way out because they give businesses an excuse to put a lot of consumers into a single box. But let's be honest here. Acronyms are also kind of cute and can be fun to use to identify various market segments. Think about it. There are DINKs (duel income, no kids), SINKs (single income, no kids) and HENRYs (high earners, not rich yet). Then there are SENILEs (self-employed, no insurance, low expectations), TWERPs (tightwad with early retirement plans), NERDs (nice earnings, ridiculous disciplined) and LOHAs (lifestyles of health and sustainability).
Hotels and resorts sometimes use these acronyms too. A few have even created "customized" acronyms for some of their market segments. We have good friends who spend winters at a gated hotel/resort community in the Southwest. According to them, the local nickname for older "snow birds" is Q-tips because they have white hair and wear white tennis shoes. Enough said.
Many people think that market segmentation began with the advent of the Internet, or at least with the advent of television. In reality, you have to go all the way back to Ancient Greece to witness the birth of dividing consumers along one characteristic or another. Many ancient philosophers believed that persuading someone didn't depend on only making the right argument, it was about making it to the right person, at the right time, and in the right place. In fact, the Greeks even had a word for this marketing concept: Kairos. Aristotle defined it as the art of persuasion when he wrote that arguments should be tailored to suit the audience. Sound familiar? He wrote that "democratic men like arguments that concern freedom, oligarchs are interested in wealth, aristocracies want to know about education and the maintenance of national wealth, tyrants want to hear how best to protect the tyrant."
Other examples of segmenting the market are sprinkled through history. Book binders, for instance, would produce plainly covered bibles for the common man and ornate ones for aristocrats. After the Reformation, architects would design baroque churches for Catholics and more austere edifices for Protestants. And if we fast forward to the Roaring 20s, the long-time President, chairman, and CEO of General Motors Corporation, Alfred Pritchard Sloan, Jr., announced that GM would build a car "for every purse and purpose, with a different brand of car for each segment of the market." Market segmentation had arrived.
With the advent of high powered computers, businesses from Amazon to Zara have jumped onto the segmentation bandwagon with gusto. Big Data and Analytics are increasingly invading the C-suites. Using sophisticated algorithms, businesses are now able to quickly and precisely define and subdivide large consumer groups into identifiable slices that have similar needs, wants, or expectations. Their goal, just like Aristotle's, is to design a marketing mix that precisely hits the hot buttons of these targeted consumers.
Basically, there are four ways of identifying specific groups with common characteristics. The most common, of course, is by demographic traits. These are quantitative individualities such as age, gender, income, and location. The next way is by psychographics. These are the qualitative attributes and are commonly referred to by the acronym IAO – interests, attitudes, and opinions. Are they more old-school or Avant-guard? Are they formal or casual? Are they high-tech or not? What about adventurous? These traits are somewhat more difficult to measure, but you can get a good handle on them through surveys and focus groups. The third segmentation method is also quantitative and can use information already in your data bank. It is by behaviors. You know how often guests stay at your property, their purpose, how much they spend and on what. Keeping up to date, accurate data of guests and how they use your hotel allows you to segment those who come for what, who buys certain products/services and spends at various levels. You will then be able to target segments with appealing offers in the future.