These days it’s impossible to think about marketing without considering the implications of the digital revolution.
The phrase “Web 2.0″ started to buzz more than a decade ago. The concept was a simple one, empowering web users to interact and collaborate with each other online rather than limiting them to the passive viewing of content. This seemingly simple technological innovation turned out to be the most profound driver of social change since the industrial revolution. Talking to each other online has transformed our lives – affecting how we heal ourselves, meet our mates, consume media, grow food, do politics and wage war.
There’s no doubt that digital media has changed the customer’s purchasing journey. When technology enabled consumers to seek advice and information from each other on a massive scale, it splintered the marketing funnel into a tremendous number of continually shifting touch points. Nowhere is this more evident than in the hospitality industry, where interactive online forums have wholly transformed the relationship between hotels and their guests.
There’s little doubt that the speed of change will continue to ramp up. Remaining entrenched in what you know is comfortable, but also dangerous in these turbulent times. Hotels can build economic resilience by adapting to the digital world and testing unfamiliar strategies.
To this end, here are some big ideas to consider.
It is no longer enough to meet your guest’s expectations. Alternative choices are just one click, one Google search or one TripAdvisor listing away. Hotels that differentiate themselves by surprising and delighting their guests will stand out in the crowded World Wide Web.
Digital life is fluidly integrated and cross-functional. It’s a massive, real-time collaboration. Consumers don’t distinguish among types of online content. Advertising, product information and even news are all viewed through the same ‘social’ lens. In stark contrast, traditional corporate life runs like a relay race with each department operating discreetly and passing the baton upon completion of tasks.
When a guest digitally interacts with a hotel, he expects and assumes that he’s communicating with the entire company, not just one department. Hundreds of customers may interact with a single hotel every day. These interactions must be filtered, interpreted and distributed in order to bring the “Voice of the Customer” into operational decisions.
The question is how does customer data flow from the marketing department into operations quickly, seamlessly and, most importantly, proactively? The internal adoption of digital tools that increase collaboration may empower disparate team members to make quick operational iterations that improve customer experiences.
In the age of “infobesity,” the biggest gift hotel guests and prospects can give the customer is attention. Utility marketing is about delivering such incredible value at all touch points that you become part of your customer’s life.
Content must entertain and be generously useful. Hotels need to dedicate more resources to “surprise and delight” and intangible strategies like being fun, telling great stories and providing value if they want to stand out.
Hotels need to meet the quick response expectations of today’s mobile consumers. Success rests with communicating a consistent image, and providing value every place the hotel interacts with its guests – including online search, social media, on property service and post-stay reviews.
Digital interactions are fast-paced and fleeting, so impactful participation requires agility and iteration. Gone is the luxury of spending a month crafting a long-running campaign, setting it loose in the world and then assessing the results on the finish line. Instead, marketers need to execute short-term, customer-focused, iterative projects using real-time data.
Agility requires digital teams to dismantle complex organizational structures, foster collaboration, remove processes that slow them down and use project management tools to tame overwhelming volumes of work so they can get out of reactive mode and focus on initiatives that drive growth. If the organization in which they dwell isn’t agile, it’s difficult for the marketing department to deploy real-time strategies. Cumbersome approval processes, unclear goals, fear of failure and risk adversity all hinder agility.
As marketers become more responsible for growth, they have an unprecedented need for speed and flexibility. Agility may equal a tremendous competitive advantage, and hotels that figure it out first will outperform the rest.
Distribution expenses associated with Online Travel Agencies (OTAs) are currently growing faster than hotel industry RevPar and ADR. At the same time, metasearch platforms are disrupting hotel room distribution. Metasearch engines aggregate data, such as rates and availability, from multiple OTA and hotel websites and then concisely display it in search results. The inherent transparency of metasearch results are diluting rates, as hoteliers cannot differentiate their product via self-described amenities and services in brief search results.
Combating metasearch will be no easy task. Power in the metasearch market is consolidating in a small number of savvy gatekeepers with deep pockets who enjoy a near monopoly on demand, including Google Hotel Finder, TripAdvisor, Trivago and Kayak. These giants outspend the major hotel brands on search advertising by a ratio of four-to-one.
If current trends continue, the potential exists for hotels to pay transaction fees on as much as half of their inventory to a small number of large media companies controlling demand. This fact underscores the importance of creating smart data-driven channel distribution strategies. It highlights the critical need for sales, marketing and revenue management departments to intentionally integrate their customer acquisition strategies.
The inability to do so will result in rising customer acquisition costs and eroding profit margins. Conversely, careful tracking of costs and benefits associated with every revenue channel will enable hotel managers to pursue a mix that results in more revenue flowing through to the bottom line.
Social media is now fully integrated with travel and hospitality decision-making, providing a beneficial opportunity to develop relationships with guests, as well as creating transparencies that highlight service inconsistencies.
Differentiation, value and authentic local experiences will influence consumer decisions in 2015. In mid-market hotels, where differentiation is harder to achieve, hotels may combine value-added services with authentic local experiences to stand out. Consumers today are more willing to pay for quality experiences than hard products.
Consumers are also increasingly value conscious, with the internet providing unlimited scope for price comparison and greater transparency of the guest experience. Products with clear value for money will be the most resilient.
Innisfree’s in-house marketing agency, is excited to see what comes next!