Bringing to life the old Sales & Marketing Plan into a plan, not a Presentation
It is that time of the year again! Approaching the fourth quarter and if you’re in marketing in the Hospitality industry, you know what that means; New budgets and projections. Now, how often do you and your team actually go back and visit that and ensure you’re on target and have stuck to your targets? Do you have quarterly milestones to track progress and dates set for when to start implementing new seasonal campaigns and promotions?
From our experience, many have the best of intentions to create a plan and stick to it, but it can be one of the hardest things to project, implement and track. That’s why many of the hoteliers we work with often shy away from sharing these plans that have so much time and energy put into them to become the biggest paperweights only to never get revisited. So, we stepped back and looked at this issue; Is there a better way to approach this antiquated sales and marketing plan? How can new hoteliers and managers have a more flexible framework for warmer seasons, variations in guest behavior, destination highs and lows, or extreme circumstances (like pandemics) going forward?
As we started researching, we found one common denominator. The Sales, Marketing, and Revenue Management teams were working on their own individual rather than a collective and collaborative fashion. What would the result be if these three departments worked in unison rather than in silos? Universally, everyone agreed that the results would be transformative and outstanding.
So, why haven’t any brands or hotels explored how to break the silos and work towards a collective hotel marketing strategy?
The Familiar Hotel Sales & Marketing Plan – Why the Historic Silo Model Worked so Long
One of the first considerations that we looked at were the different functions and personality types of each department. We recognized that part of the problem between the three (Sales, Marketing, and Revenue Management) is that they have very different personalities. Salesmen are typically the go-getters and charismatic personalities that are relentless. When it comes to marketing personas, they are the creatives and the strategic personalities that are able to bridge human desires, needs and behaviors. Revenue managers are traditionally very financially end logic-oriented. So, it’s natural and understandable that these three personality types wouldn’t organically get along and work cohesively around goals and tactics to achieve them. Over time, there would be a conflict that drives a wedge and results in these silos.
But, the old system and approach worked, didn’t it? Depending on who you ask, you’ll get different answers. Each department would claim yes. However, most owners and investors would agree that it used to work, but there is undoubtedly a better way they can be integrated. Kathryn Baker, Partner at TCRM a Revenue Management company for independent hoteliers, reinforces that “Not so long ago, there was often tension between the Sales department and the Revenue Management leader.” Depending on the review or bonus structure of the Sales team, Revenue Management might have to push for higher group rates, less LRA (last room available) accounts, better group patterns, etc. “As the role of Revenue Management grew , and compensation structures revisited, Sales was no longer the enemy! The bigger picture of the entire property became the focus, and what was best for that, instead of internal fighting over market segments.” Baker shared as she reflected on the old-school approach the industry took.
Since the creation of Revenue Management, there has been a proliferation of other online outlets that drive traffic and revenues. Online travel agencies, travel agents, group bookings, and government and commercial opportunities have arisen that have kept the industry afloat. Due to the high demand, we were able to see that even with the rise of many new properties they were able to stay relatively booked across the multitude of channels and market mixes that were available. That is of course until there were blips in the economy, such as 2001 and 9-11, 2008 economic crisis, and most notably, COVID-19.
Adapting with the Business Landscape & Consumer Demands – Why it’s time for a Shift in Hospitality Marketing
Without group sales, events or other large buyouts to support hoteliers, they will need to market and target the leisure and business traveler for the time being. That being said, they will need a larger number of this audience staying for increased periods of time with larger groups to help drive revenue. The pandemic should not be the only reason that the industry needs to adapt.
In almost every other industry, businesses look at efficiencies and how to increase the effectiveness of its efforts without compromising the end product for consumers. While this is done throughout the supply chain and in particular around food and beverage, it is overlooked within the hospitality industry. Additionally, as guests become more tech-savvy and familiar with their online buying behaviors they will naturally gravitate towards those that are superior in their online presence. To stay competitive and meaningful to consumers, hoteliers at large need to elevate their online experience. Mirroring the best practices and strategies today’s consumers are familiar with that work in e-commerce, automotive and real estate is needed to not just stand out, but to be up to par with their audience. A deep dive into the guest’s booking journey also shows where guests are leaving the booking process and opportunities to enhance their experience with relevant and timely information. Things like “Know Before You Go” documents, weather information, “local style and apparel” guides, safety, transportation, currency exchange and other pertinent information can instill comfort and confidence in visitors that seek such information and detail before booking.
Translating other best practices, such as other “recommended rooms” within the property that guests might be interested in as they are looking at the property details page, can increase profits. Consumers are familiar with Amazon and other e-commerce sites and how these sites recommend other products or even warranties associated with them. Providing easy access forecasts to a few other rooms that have perhaps a better view or larger square footage within a similar price range is an easy way to compel guests to look at the experience above and beyond what they originally might expect from booking.
What business does Revenue Management have regarding website content and guest messaging? Not only can Revenue Management often provide invaluable data to support strategy direction in this area, i.e. which room type is the most popular or ‘How far ahead are guests booking for summer weekends?’, but Revenue Management also has that “big picture” focus at all times. What policies are on our website? What kind of packaging and amenities are guests requesting and prefer? Baker said,“To date, it’s often been a division of duties between the website (marketing) and the booking engine (Revenue Management) – but the two are so completely intertwined that it’s shortsighted to work separately and keep the other department at bay.” Managing this together ensures consistency, accuracy and best meets the guest needs.
Recommending other activities and personalizing their experience with spas, dining experiences or other local adventures is a wonderful way to deepen the experience for guests before they even step foot on property.
Finally, for independent hotels, this integrated commercial hospitality marketing strategy is one that will differentiate your boutique property from other flagged and branded properties within your destination. Because research is so accessible to consumers today, every detail and micro-moment you can create for them that provides value and makes their research process more seamless the more valuable your brand becomes. Seeing as guests are researching a multitude of properties within a destination, continuing to innovate and provide customer service online at the same quality and caliber as you do off-line will further differentiate your property to prospective guests. Millennials, remote business workers and empty nesters alike are seeking new and more immersive experiences when they travel. Catering to consumer’s demands now means being intentional with your marketing and strategic with your messages to each audience and demographic. In doing so, you’ll be sure to attract your most profitable customer and refine a sustainable strategy for your hotel through the good times as well as the bad.
The New Full Occupancy Framework – Integrating & Aligning Department Goals for the Property
Given that nearly all hoteliers have had to let go of nonessential staff and downsize to keep their doors open during this time, how can hotel leadership align and integrate this new Commercial Hotel Marketing Strategy? Like any team or business, redefining the collective mission and vision or adapting the existing one to fit, is important to ensure continuity and cohesiveness. Whether this is internal or external, taking the time to define these and the respective goals on a shorter 90-day or even monthly time frame is central to make sure everyone is on the same direction.
The new Full Occupancy Framework that SoCap is creating for the hospitality industry is designed to create accountability and collaboration across departments for larger and more universal goals. For leadership teams, this is going to increase transparency and return on investment of the various efforts and tactics that these departments individually and collectively are executing. During leadership meetings, it will be easy to view the successes and progress towards the various department and property goals and empower leaders to be more flexible in their approach as they can clearly see which initiatives are gaining momentum and where the dollars are going the furthest.
This ultimately enables the hotel brand to create repeatable and sustainable marketing strategies and implement them at scale. By refining the interplay between Sales and Marketing and how Revenue Management can appropriately manage the demand to drive possibility for the organization, leaders are able to understand and duplicate marketing and sales initiatives that were successful with more insights about what worked to achieve success. Having goals is a well-established part of hotel management. Often, these goals are person or department-specific (sales goals), or broad and long-term (meet budget, beat comp set in RGI) What if we worked with – and measured – smaller goals that become the stepping stones to building a measurable strategy? Goals related to marketing for a specific campaign can be created and measured, RM goals can be more tangible (direct channel at 50% for weekends in February; increase length of stay for Saturdays to beat comp set next month, etc). “When we start measuring these, we find out what we CAN do, what works, what doesn’t. Then we can revise for the future – both the goals and the strategies to meet them.” shares Kathryn, optimistic about the road ahead for this cohesiveness. In the future, the team can unite during a slow season or unexpected cancellations to repeat this process and mitigate the losses by leveraging former successful campaigns and their tactics.
The long-term implications of integrating these three disciplines is not solely driving the profit wedge with more bookings and RevPAR, but building brand equity for a future sale or acquisition. With repeatable and sustainable results, owners can leverage their Commercial Hotel and Marketing Strategy as an asset to a future buyer. Having transparent and repeatable results will give owners the ability to scale with cash for less interest or to liquidate at a higher multiplier. Coupled with a strong employer branding strategy that reduces training, recruitment and poor productivity in the future owners are able to have a compelling narrative to provide to banks and future investors about the strength and resilience of their organization thus justifying selling at a higher multiplier and getting cash cheaper.
The benefits of Sales, Marketing, and Revenue Management working proactively together are endless. Creating goals together, planning and pivoting together, and always keeping the big picture in mind – are things that will push a hotel over and above competitors. Regardless of where your hotel or brand is within its lifecycle, leadership teams should be revisiting how they are able to align cohesively in the new business landscape to achieve superior results. The businesses that will thrive and be attractive to future consumers and investors innovative approaches to achieve their business results. Our invitation is that if you see the possibility of superior results by aligning these three departments more intimately, we would be interested in exploring what the possibilities and results for your organization can look like.