In order to achieve a successful marketing plan, marketers in lodging companies should take into account the importance of constructing a well-organized strategy which eventually helps to compare the actual outcome with the expected one.

“Who does not have a plan, is actually planning to fail!”

Lodging companies are businesses which utilize the sharing economy principle which aims to share and distribute resources among different entities, instead of conducting a traditional form of business based on goods production. Hence, leveraging information technology relies on intangible factors more than the tangible elements that enable customers to make use of the provided services.

Lodging could be either any form of hotels or private property, in which customers would mainly choose based on their personal experience with the services provided.

Digital Marketing Plan

The benchmark of any effective strategy could be addressed by setting up SMART goals, which stands for specific, measurable, achievable, relevant, and time-framed.

How to set up a specific target?

The most important factor to achieve sustainability is to be consistent in following certain steps in order to reach the desired results. For instance, lodging companies should define their vision which focuses on long-term sustainability projects, in addition to overall missions including current development plans and main objectives. Consequently, they have to improve the brand awareness among customers within a certain niche, as earning their trust is the key to success.

Therefore, setting a definite plan with a specific budget seems to be a good start to act upon. The following table outlines a certain digital marketing plan which dictates the projects and relevant tasks:

By utilizing each category of the digital marketing tools, lodging companies would maintain an active presence in each and every platform needed to increase visibility and eventually generate more leads, and subsequently a better conversion rate.

How to measure and track KPIs?

Key Performance Indicators (KPIs) measure the performance of businesses over a certain period of time, which would evaluate the success of those organizations and determine the underperforming factors to be later modified and improved accordingly. However, lodging companies should follow a coordinated digital marketing plan by defining their marketing budget, as for instance, allocating 75% of it to customer acquisition and the rest to build up and preserve the branding efforts. The following table summarizes some digital marketing expenditures, and the related performance indicators:

The calculations started with assigning marketing budget between promotional expenses and other related retainers. Afterwards, they referred to the importance of measuring the average income per customer including both average first deals and the upselling techniques, through providing even more expensive luxurious services and additional add-ons to maximize profits. However, the monthly target of digital marketing expenditure should be reached, and any gap with the monthly total should be mitigated.

By realizing the Churn rate, that would help to calculate the Lifetime Value (LTV) which refers to the average revenue generated from each customer over the duration of their accounts. Taking into account the recommended LTV:CAC ratio of 3:1, the Customer acquisition cost (CAC) would define the average costs needed to attract a single customer, which is considered the pivotal factor whenever it comes to spending-related decisions.

The number of new customers and number of leads generated could be assessed on a timeline basis, i.e. monthly, in order to improve future growth for each interval throughout the year, and become the benchmark to compare with other competing lodging companies.

How to achieve realistic marketing results?

The Marketing Mix of lodging companies should take into account to all the 7Ps elements as defined in the following:

Price

The first factor of the marketing mix is the pricing strategy, in which lodging companies can adopt a strategy that is based on each category of their customers. For instance, Guest segment-based pricing takes into account the requirements of guests segments. Some customers are value-seekers, while others and luxury-seekers. Hence, finding the right pricing scheme is the cornerstone to reach a competitive status among others in the same business, as it also relies on online reputation in providing consistent quality services.

Place

Families with kids would rather choose places where their children can find nearby playgrounds, meanwhile young people who are more interested in nightlife and entertainment in general, seek places in proximity which would satisfy their needs. However, the outside view and size of the location gives the lodging businesses the possibility to match the prices with the value of the services, which is related to customers’ satisfaction.

Product

The products provided by lodging companies could be addressed as packages of offers and services, which could be chosen based on customers evaluation of pricing and quality services provided. For instance, customized packages help in achieving a variety of options to the customers, in which they can choose having for instance, “breakfast packages” or “honeymoon packages” for newly-married couples, that might provide them a different personalized experience.

People

Well-trained staff is an important asset to any business, especially lodging companies. Therefore, they should regularly invest in upskilling their employees to achieve a renowned status in professionalism, which in return creates intangible value and leads to more loyalty to the brand.

Process

The platforms used to communicate with the customers are very essential and integral parts to the success of any lodging company. Hence, creating decent relations with them, and providing them with tools needed to write their reviews and feedback is crucial to the improvement of the services.

Promotion

Inbound marketing activities such as social media, content and influencer marketing, in addition to dealing with online travel agencies (OTAs) should be addressed whenever planning a marketing budget, especially during promoting special events. However, utilizing SEO elements is also a very dominant strategy which enhances the visibility of lodging companies.

Dynamic Ads for Travel (DAT) is considered an effective tool in promoting businesses as it helps to reach customers through relevant customized advertisements which easily match their interests and eventually lead them to the tailored land page.

Physical Evidence

The physical evidence means to provide the services in a world class environment, in which customers could experience the facilities, then they can make a comparison between the promised and actual utilization of the services.

How to make the KPIs reflect the overall objectives of the lodging companies?

Lodging companies must conduct a thorough Marketing Analysis in order to address the main issues related to their efforts over the previous periods. Hence, the 5 C’s of marketing outlines the best method to analyze those matters:

Company

Each lodging company has to evaluate their performance by achieving economies of scale, in which they can assess their outcome in terms of conversion rate with the related costs to determine the cost per conversion (CPC), which eventually aids in determining the size of business. In addition, they can perform an asset management analysis to figure out which category including fixed, variable and innovation assets had brought advantages to the business over time. Therefore, lodging companies might alter their service offering or to do a rebranding.

However, lodging companies can allocate funds to their digital marketing budget by taking into consideration the number of rooms at property, average occupancy rate and average daily rate (ADR) which calculates how much an occupied room per day would generate rental revenue on average.

Customers

lodging companies should take into account the interaction of their niche with their online platforms and social media channels. For instance, 86% of travelers might be inspired by travel-related posts to determine the destination of their next vacation. For instance, each category of customers including luxury, social and habitual travelers seek to have their own experience which might relate to their age, budget and even personality.

Moreover, whenever they view video advertisements or read feedback from other customers, writing about their experience, that would generate leads and enhance the possibility of an actual conversion.

Furthermore, Google had proposed a strategic model to work along with the customer’s journey, starting from the (1) Dreaming stage, where customers try to find sources to their surveys, (2) Planning stage, in which they begin to actually plan for their booking by comparing with different competitors, (3) Booking stage, as they become convinced with offers provided to them, (4) Experiencing stage, including the activities are planned according to the offers, (5) Sharing stage, the assessment of the whole journey which would keep the current customers and attract new ones.

Collaborators

Collaborating with OTAs has proved its worth as it provided an incentive to the customers to visit the landing page and other related web pages to survey the services and take action. Such efforts would definitely boost the traffic to the main website by serving as a distributing channel through posting their reviews and comparing prices.

Competitors

Observing the competitors and learning from their successes and failures are crucial to analyze the designated niche and build up a competitive business model and an effective marketing strategy that can guarantee sustainable growth in the future.

In terms of Digital Marketing and Game Theory, it would be a better strategy for each player to advertise, as it leads to a better pay-off and reach the Nash equilibrium, a solution to achieve mutual benefits with competitors in non-cooperative normal form games, compared to the other outcomes. On the other hand, when players choose to heavily advertise, that leads to an adverse effect on all of them, as that would diminish their overall profits.

Climate

The technological elements have become the most important factors whenever forming a digital marketing plan. Hence, mobile marketing is one of the top marketing strategies as 85% of people use phones to book travel activities and 75% of them would document their vacation on social media platforms.

Mobile accessibility to a website full of intriguing content of offers and services and call to action features is a key factor to attract an audience as 86% of them would plan to visit based on the inspirational posts.

Furthermore, optimizing ‘Google My Business’ account, which enables the companies to provide a featured summary of their business to the google search results, in addition to utilizing Google Hotel Ads and Google Analytics which track the data and offers an insight to maintain their ranking among the competitors.

However, email marketing has the highest Return on investment (ROI) as it has 40 times more efficiency in attracting new customers than Facebook or Twitter. 82% of companies use email marketing technology when dealing in B2B and B2C levels, which generates through automated emails 70% higher open rates compared to the normal marketing messages.

Personalized mobile emails would guarantee a better customer engagement, in which they lead to a 66% higher conversion rate compared to other social media platform

How to achieve KPIs in a definite time frame?

Setting objectives in a timely manner is the basis for any successful marketing strategy, which takes into account offering customized services based on seasonality and special events, by providing personalized holiday deals.

In order to effectively increase the engagement with related services, marketers should set a yearly marketing plan, in which they can concentrate on achieving a certain target throughout the year, such as increasing traffic on their companies’ website. By having a specific monthly task and its subsequent result. For instance, a 30,000 increase in sessions could be an achievable objective which enhances the possibility of eventual conversions.

Moreover, targeting customers during the peak periods of vacation seasons proved its worth, as the click-through rate (CTR) would reach its highest levels based on an optimized email marketing campaign.

Conclusion

Lodging companies operate in a highly sensitive and competitive field, in which they are affected by intangible factors more than the tangible ones, as for instance, a well-written negative review or harsh criticism from influencers would deter future customers from experiencing the journey by themselves.

However, certain digital marketing tools such as email marketing has proved to have the highest ROI of any marketing channel. Studies show that marketers make $44 for every $1 they spend on email marketing. It’s 40X more effective than using social media to generate sales.

Achieving pre-set KPIs is the benchmark to measure the success of the marketing strategy, including Customer acquisition cost, number of new customers and new leads generated.

Such endeavor has to rely on efficient marketing tools for lodging companies such as social media marketing, search engine optimization, retargeting marketing, and especially email and mobile marketing.

In the end, relying on historical data and understanding the importance of Marketing Segmentation by providing personalized discounts and promotions, and setting clear marketing objectives to enhance brand awareness and customer retention are the only tools to sustain growth and success.

By: Mourad Alhasan