What is the key opportunity in the hospitality industry that can help your hotel generate more revenue in 2016? It is customer loyalty. Industry trends demonstrate that it is easier to convert current customers than to look out for new ones. In the online space today, where ad impressions, clicks and conversions are getting costlier with every minute, acquiring new customers is an expensive exercise. So selling more to existing clients sounds feasible for hospitality and travel companies of all sizes.
A recent survey by a leading research firm – Software Advice – revealed that “30% of millennials prefer earning points based on the money they spend at the restaurant’’ .
This rings a bell somewhere!
Your customer is open to shop at a competitor happily, which is not acceptable for your business goals! On these lines, many hotels try to create a loyalty program by primarily offering specials through newsletters. Rewards are a good method to acknowledge loyalty and also drive buying behavior. But, in case a business wants to leverage loyalty from clients, they need to make sure that the customers are repeatable, profitable and do more than make purchase offers based on past purchases.
This throws light on the fact that – loyalty creates a very strong relationship amidst customers and businesses, but price does not drive loyalty. Rather perceived value of the product or inventory drives the same! Now you may hurriedly ask yourself, when did you last re-engage your current customers with loyalty goodies? If you have, did any of them come back?
If you are inclined towards leveraging customer loyalty to boost your revenue bottom line, ensure that customers believe your business offers value for money and they “know that you love them”! Here are a few cool strategies that influence your current client base to purchase more frequently, by relying on inside sales, up-selling, and marketing additional services.
- Give due importance to lifetime value.
Transactional value will follow automatically! In order to ensure that customers keep coming back, you can try to offer attractive incentives to specific targets, for example, families with children. Remember that the one-off profit made on an average sale is not related to the aggregate profit of an average customer that is represented by a business relationship. You have to recognize these combined profits followed by the time, effort and expenses going behind every loyal customer’s retention strategy.
- A study by Amazon stated that 35% of sales were a direct result of cross-sells!
By introducing ‘Customers who booked this room also bought’ on a hotel website and ‘Frequently clubbed together’ or a ‘Discounted second booking’, you can churn out a lot of revenue! These cross-selling geniuses are neat ways to absolve customers from hard-selling whiffs. The same can be incorporated into your brand website. Automation of such recommendations is better than manual uploads onto a hotel’s portal. It also helps you save time and divert attention towards inventory sales.
Suggest complementary products or catchy service offers in these pop-ups. What do your customers look for? What are the add-on needs that their bookings trigger? Remember that offering complementary products will surely help you to expand your gross margins by almost 25%!
- You have to reduce attrition by identifying inactive (and previously loyal) customers before it is too late.
Though you invest heavily in laying the foundation initially, your acquired customer relationships go unattended which make these clients lose interest over time. Sometimes, your brand might get abandoned for a competitor. Detecting this bleeding point at the right time and stopping the leakage can actually help you double or triple your growth rate!
- Take criticisms positively.
“96% of dissatisfied customers don’t complain.” – Marketing Wizdom
If your customers are walking away without a hint, then it is your job to find out why. Allow them to communicate and lodge complaints. Make them believe that this activity will make a difference. Set up a system like a social media funnel, to unearth complaints/suggestions, for it can become the lifeblood of your hotel. This will fortify your brand’s customer loyalty and encourage the existing patrons to invest more!
- Do you have in-house products and services available?
Put your fashion or souvenir stores, tennis courts, spa & wellness centers, water sports equipment, gymnasium, etc. to good use. Plan your services right to attract guests. Even if you have a small hotel with few in-house activities, cross-sell them. Put innovative ideas in place by collaborating with local restaurants, tour-operators, stores, libraries and activity centers. Before rolling out the strategy, study your existing guest’s characteristics carefully. Be precise and careful before initiating the conversion.
Every single room reservation can eventually churn out revenue from your loyal guests, provided you apply the appropriate instigations by placing online content at all the right places, in the form of offers and promotions.
“62% of millennials feel that online content drives their loyalty to a brand” – NewsCred
Remember that a happy customer buys regularly from you and also spreads the word. They recommend your hotel to friends, family and relatives through casual referrals. So, the right management of services and applying the right tools to sustain loyal customers will surely help you convert more.
Capgemini’s research revealed that ‘fully engaged’ customers deliver a 23% premium over the average customer in share of wallet, profitability and revenue.
Every hotel guest loves to spend, which makes them the biggest revenue generators for your hotel. It’s high time you started tapping on this opportunity!