The power of online customer engagement for hotel direct sales
What your washing machine can teach you about e-commerce for hotels.
Have you uncovered the potential of online customer engagement for hotel direct sales yet? For most people, marketing consists of pushing their product to a target customer segment. This approach, however, is short-sighted, obsolete, expensive and offers decreasing ROI.
This article is about how you could sell more – by shifting your marketing focus from how great your hotel is, to how your customer will perceive and experience it.
This simple shift in focus explains why Airbnb outmarketed its competitors such as HomeAway or Booking villas. They did this despite their competitors being there before, having better funding, and more inventory.
Today, Airbnb’s traffic has caught up with Booking.com. The big difference between these 2 OTAs is that Booking spends billions in AdWords whilst Airbnb doesn’t need to. This is because 85% of its traffic is natural. Airbnb’s capacity to engage customers drives sales and saves the company a few billion dollars a year. Also, Airbnb customers tend to cancel much less (cancellation rate on Airbnb – 5% vs. Booking – 20%).
Creating a second Airbnb will be hard. However, at your own scale, you could leverage the same mechanisms of engagement to strengthen your e-commerce strategy.
Customers are just not that into you…
Most hotels are good or even very good, but very few are special. So, your customers do not see any substantial difference between your product and your competitor’s.
Conventional tools such as revenue management, beautiful pictures, SEO and metasearch are essential. However, they won’t give you any competitive edge because everybody is using the same techniques.
Let’s try something else. Georges, a Parisian hotel group owner told me once, I no longer have a Revenue Manager, I invested in a Guest Experience Manager. Price is only one pillar of marketing but somehow we grew obsessed with it in the last 20 years. Partly because it looks like a science, and revenue managers can take credit when things are going well and blame the market when they are going south.
This model, that worked wonders in the 2000s, is quickly becoming obsolete. Consumers now tend to value experience and personalization over product. The way to go is to put customers’ dreams, aspirations and needs at the center of your marketing strategy. Success is rewarded with higher customer engagement. Taxi drivers understood it a bit too late when Uber disrupted their market. Let’s hope hoteliers do not become the new taxi drivers. (For more on this analogy, see the article by Peter O’Connor: Are hotel owners in danger of becoming the new taxi drivers?)
In dating and sales, caring is important, technique is essential
As a hotelier, you are committed to doing everything you can for your guests. However, this goodwill is not often perceived or properly valued by customers. So you might be wasting good energy that you could channel in a different, more rewarding way. Good intentions are neither effective nor scalable without a proper technique. And customer engagement for hotel direct sales works where intentions do not.
Airbnb creating 7 well-defined personas was a stroke of genius. These captured the core motivations of each one of their 310 million customers. They turned it into a very simple tool to quickly understand their travelers’ dreams, aspirations and needs. Airbnb teams share and use this matrix as a compass while taking decisions. If you’re a hotel manager, you’re also an expert at understanding customers. But, your receptionists and night auditors interact with more customers than you. Are they as well trained as you are?
What’s beautiful about this is how easy and scalable Airbnb made it for its teams to perfectly and immediately understand its customers. This approach is well known in startups. In my own example, we have used it to develop our product (Quicktext). It helps us win almost every time we are confronted with a competitor. It creates strong relationships with customers because we all speak their language and understand their way of thinking. Here is the basic Excel matrix we used. Don’t hesitate to use it to make your own!
Joie de Vivre Hospitality was founded in 1987 by Chip Conley. (BTW, he is currently one of the key advisors to Airbnb). The group is now the second biggest operator of boutique hotels in the US. Their website offers visitors the possibility to choose how they want to experience JDV properties.
Sibuet Resorts gives us another brilliant example by selling dreams to their customers rather than hotel rooms.
They have profiled their online visitors. So, the autocomplete suggests ideas related to what customers might be typing. The term piña colada is still missing, though! I’m sure Sibuet will add it soon.
Turn a flirt into a relationship
The conversion rate for hotel websites is usually about 2%. This means, 97-98% of your online visitors leave without making a purchase. You could do better.
The difference between browsing and interacting with your website is the level of commitment. When the customer is interacting he is actually investing in you. So, try everything you can to stimulate and capitalize on this behavior because it instantly sets you apart from your comp set. While interacting, customers create a bond with you and share their wishes. They actively invite you to guide them and lift the burden of choice from their shoulders. Consequently, what matters is your capacity to sense, react and be immediately relevant for your customers.
The good news is that our brain is wired in such a way that it doesn’t even require a human being to do the job. We all have a tendency called Pareidolia that makes us assign human characteristics to things that aren’t. For instant scientific proof, have a look at the picture below.
Euston Square Hotel is an independent property in London that uses Quicktext and Zalia chatbot for hotels. Zalia is an artificial intelligence that answers customers’ requests. It consequently increases bookings on the hotel website plus other instant messaging platforms. Zalia chatbot for hotels can manage about 77% of customer interactions and calls staff for assistance only when sharp human intelligence is required. The opportunity in this kind of technology is that at the very least, it gets your potential customers to open up and willingly share their name, needs, phone number, email address, etc. If you start capitalizing on it, you are the one in control of the sale.
On Airbnb, the option “contact host” is available before booking (something you’ll never see on Booking.com). Also, a mandatory online greeting before concluding the booking process is probably a key driver of engagement. I bet that if you’d request the customer to say a few words to complete his booking, it would have a positive impact on cancellations.
You know that you have no access to big data and most of the times you do not have big means either. Engagement techniques are simple, inexpensive and do not require you to drop your prices to increase sales. Nothing beats online customer engagement for hotel direct sales.
Relationships change you for the better
Until recently, the Revenue Manager was the second-most valued rank in the hotel hierarchy. This function is essential, but customer-facing jobs should be considered just as important. This, instead of the roles in which hotels try to save as much as possible.
The transactional role of receptionists is bound to disappear because managing check-ins/check-outs can be done better and cheaper by machines. So stop hiring receptionists: you don’t need them anymore. Instead, start thinking about welcomers that would be in charge of creating high-quality interaction with guests if they are open to it. (Some customers don’t want to talk to you and that’s fine). I think that Village Hotels in the UK have handled it quite well. They put auto check-in interfaces around a welcomer. That gets you the best of operational efficiency and high-quality interaction.
As you try to make your customer’s life easier, technology plays an essential role in operational success. Cloud hotel management solutions, messaging technologies, and artificial intelligence are essential for your team to successfully scale customer centricity.
If you decide to go for higher customer engagement, you know that it is first and foremost, a change of mindset.
At some point, marketing techniques become useful. For further reading, I strongly recommend Predictably Irrational, Nudge, Hooked, and The Choice Factory.