Article for Wednesday, 30th of March 2011

A few years after its creation, marketers have understood the power and huge potential that Facebook represents for their business. Although the use of Facebook as a marketing tool is very recent, we can already observe an evolution in how it is used and in how it impacts sales growth and revenue.

The article "Facebook leads to hotel room revenue" explains us that Facebook is not used only for CRM any more. With the development of the e-commerce, more and more hotels for instance integrated a booking engine on their Facebook page, offering their guests an additional option and service. Has it proved successful? Certainly. For some hotels, the conversion rate on direct referrals from traveler review sites to hotel supplier websites ranged from 4% to 6% in 2009, while conversion from Facebook to hotel websites was 8%. It is of course not as well developed for all the hotels but most hotels have now realized the potential behind Facebook e-commerce and the possible impact on their revenue. Thus, many have started developing, in addition to their customer-engagement marketing, an e-commerce activity on their FB page, like Westin Hotels & Resorts in January that introduced a shop tab on its properties' FB pages.

This trend is promised to grow with currently more than 13% of social-network users using social networks to shop for travel, according to the firm’s “Traveler Technology Survey 2010. In addition,

the proportion of people talking about travel on FB with their friends and family is in constant growth as well as the travelers'engagement with the travel companies on social media.

As a result, companies and hotels are jumping quickly on this FB business and even if most hoteliers still consider that the primary purpose of the social media is to engage with their customers to build trust and loyalty, few would ignore this new way of making revenue...

Comment:

For some people, the best uses of social media are: • An important component of hotel’s multi-channel marketing • Buzz-building • Brand-building • Interacting with and engaging customers • Keeping up with the times, making the hotel look current, cool and up-to-date • Driving engaged and relevant traffic to the property’s own website.

For my part, I think that e-commerce via FB is a huge opportunity. It is clearly the future of checking-in and selling on internet. Thanks to social media like FB, you can accompany your customers from the decision to purchase to the after-sales. You can give them tips and recommendations, fix any problems that can occur after or during the sales and even upsell! All of these in a friendly and more customized way. Besides, for those who doubt the utility for FB on both of these 2 uses (CRM and e-commerce), I think they should first wonder whether they use FB the right way (do they engage with their followers regularly? post interesting contents? use the proper tone? have an attractive page? etc.) and to use their analytics to discover what the problems may be. The key is to perseverate and to remember that FB is good not only at improving your CRM, image and sales when used properly but also to improve your ranking on internet (SEO) and the possibility to find your key followers, your influencers to help you growing your community online as well as your sales.

Social media ROI - In-class exercice

Social media roi

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Article for Wednesday, 23rd of March 2011F

Let's talk again about Revenue Management. The article I chose today comes from the site hotelmarketing.com and is called "Rate quotation strategies for your hotel's sales agents".

This article states the problem that is facing Revenue Management these days, compared to its strategy a few years ago. While before the rates fluctuations were more or less predictable, depending mostly on the seasonality and big events, it is now very hard to know which rates we as a guest, can expect for such and such dates. This is also true for the booking conditions and rate "fences". It is due to the sophistification of the RM tools and to the different booking practices of the customers, without mentioning the whole mutation of the distribution channels. What happen for instance is that customers book their rooms more and more often at the last minute and the rates they discover can sometimes be dramatically different from their previous booking... They were certain to spend such amount of money and they are told it will be twice as much, while maybe no parameter changed since their last booking (same room category, same period, same number of nights etc). Of course, the advantage is that the hotel optimized its revenue at that moment. However, this may be very damageable for the CRM (Customer Relation Management) and the long term stategy of the hotel.

I propose to share with you the few tips given in the article to deal with guests at the delicate step of booking.

During the periods of high demand:

• Prepare your pricing strategy in advance: during the low season, insist on the good value of your offers so that customers realize there are not normal rates for a hotel of your standing. When the high season is coming and your rates increase, care particularly about your product description. Description should not be limited to a list of features but used as a way to "make your customers dream", imagine its stay and project himself. Use sensorial marketing through the terms you use...
• Train your sales agents to mention the "rack rates" so that during high (but not peak) seasons, the customers realize that they may pay higher prices than during their previous stay but that the rates they are offered are still good value (for instance, the offered rate is $175 and the rack rate is $200).
• Be precise on the terms you use. For instance, prefer "sold out" to "not available", which conveys the idea that you do not want to give that rate to your guests while it still exists... You should also seize the opportunity to suggest other date options to your customers, particularly on the lower demand period, instead of letting them go.
• Present minimum stays as an advantage for your guests stressing the benefits they will have staying a night more (like later check-out, earlier check-in etc).
• Master upselling and down-selling. In case your premium or standard inventory sold out, do not apologize to the guests saying something like: "Sorry, all we have left is...", which gives the impression of left-overs nobody wants... Instead, turn the situation into a good news for them, highlighting the benefits they will have choosing another room category than the one they wanted.
• Tell your sales agents to be firm on prices and not to be uncomfortable with mentioning high prices as these prices are justified and you will always have clever customers trying to get a better offer, just in case it works...

 During the period of low demand:

• Do not limit your sales agents to the only mention of the lowest available rates. You should at least try to upsell with another rate, comparing its added value to the cheaper product.
• Allow your staff to offer "fade rates" or what is called "don't lose the sales rate" in extremely low period... When you feel you can lose a booking at the benefit of a competitor or a third party site (that offer lower rates than you do), you can exceptionnaly choose to offer the guests a lower rate than the "best available" one (as it is still more profitable than selling via a 3rd party site).

Tips for all market conditions:

• Always start mentioning the highest rate and finish with the lowest rate. For instance, if your pricing changes everyday and your guests stay 3 nights, mention the highest night price, even if it is the rate for their last night and give them the best price at the end. It gives them the impression to have made a deal.
• Explain your guests why rates changed since their last stay. Be honest and treat them as equal, explaining that the economic situation changed since their last stay, which explain why your rates are now back to normal.

For me who want to work in RM later, I learnt a lot thanks to this article. It all makes good sense and I am convince that as long as you have a good sales team that knows how to talk with the guests and present the products, you can sell anything. Still, I think that the fluctuation of rates can damage the relationship with the guests as RM does not take into account the value of each guests, their loyalty and the additional money they can spend in your hotel. Of course loyalty card may help to offer the best to your most loyal customers but it is still insufficient and could be improved. Not all your guests subscibed to this kind of program and they may not be willing to pay for these loyalty cards...

That's why I think a good way to mix RM and CRM is to use the new technologies. I mean using SIM to link the 2 domains, allowing hoteliers to reward their most loyal fans based on their activity on the social media. More and more sophisticated tools can be used to measure it and to integrate the score of individuals in the reservation system. It would not only improve your CRM but also encourage people to talk more about you, resulting in a free and efficient marketing for your hotel and potentially in growing sales and a better image!

Mobile Marketing Exercise for Sunday, 20th of March

Mobile marketing: The SoLoMo Approach

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Mid-term exam Social Influence marketing

Open publication - Free publishing - More influence

Article for Wednesday, 16th of March 2011

Today, I chose to treat the article "Seven tips for embracing Social Commerce". This article gives us the key ideas to sell successfully on the social media. It is indeed becoming crucial for the companies to use properly this distribution channel as more and more customers buy directly from the brand social sites and 2011 will be THE  year when social media trend dramatically grows. Understanding how social commerce works and how to catch your followers' attention is definately a huge competitive advantage. Let's see what the author's advices are...

As the title suggests, the writter gives us 7 main recommandations to implement a winning strategy:

• Check your analytics
• Understand how social your customers are
• Start using your Facebook Page to promote products
• Socialize your website
• Use a Facebook shopping app
• Investigate bespoke solutions
• Don't just sell

Basically, the idea is to make sure that your business will benefit from the presence of an e-boutique on your social media, to build an attractive and relevant landing page that will drive your customers to your site and convert them into buyers and to facilitate the purchasing process by adding shopping app and communicating with your fans. The author also insists that you should not only focus on selling and on your brand but on socialising and sharing more with your followers.

This article really well summarized the steps to develop your social commerce successfully. I am convinced that this trend will grow in the next few months and that social media may eventually replace the brand sites as the customers will find all the information they need, as well as reviews from other users and tips and special offers directly from the sellers, without mentioning the various loyalty programs and contests that may be organized by the brand on its social sites.

Still, I think that one additional advice we could give to the companies that is missing in the article is to provide a securitized online payment. It may seem obvious but it is fundamental. As I said, Social Commerce may become the main selling channel as the brand will not only be able to reach a large community of fans, share and know more about them, what they like, do not like and answer their questions and doubts immediately, give them tips and suggestions about a product and even offer their most loyal fans discounts and special gifts. Last but not the least, the social platform may facilitate the after sales services and fix the problems directly, reducing the percentage of unsatisfied customers. What is great I think with social commerce is that advantages are both for the buyers and the sellers. In other words, it is a win-win practice and companies should not neglect this new trend.

Article for Wednesday, 9th of March 2011

Today, I would like to talk about this article I found on hotelmarketing.com: "Google reaching out to major hotel brands and CRS". It deals with the new Google Maps feature added at the beginning of February, providing travelers with the average hotel rates and availability. This new service will surely have consequences on hotel room distribution strategy. Negative or positive? Let's first have a closer look at what this new feature consists in.

Since the beginning of February this year, when searching a hotel on Google Maps, you can find next to the name of the listed hotels a price followed by a blue arrow. If you click on this arrow, you will discover the prices offered for the selected hotel by the major OTAs, with a possibility to click on the OTAs' link to book online. Below, you can also have the hotel own site but no price will show up. Indeed, at the moment, Google only proposes the rates and availability for the different OTAs. Still, Google announced that it is currently working with CRS providers and the major brands, which would allow the hotels to compete more effectively with the OTAs. Below, you can have a look at what the Google Maps looks like:

Why is it so important? Even crucial? Simply because if hotels are not participating to this system, they may lose the opportunity of capturing many direct bookings at the profit of OTAs... Given the costs associated with OTAs booking, it is understandable why hotels cannot afford to keep away.

Thus, after OTAs, it is the turn of CRS providers and big hotel groups to take part of the system. Pegasus ("the developer of the RezView CRS products and provider of the hotel industry’s dominant “switch” that routes hotel availability to the GDS") is working with its hotels clients to find a way to share the rates and availability on Google Maps. Google says that eventually, bigger as smaller hospitality players will be on board.

How does it work? It willl be a PPC pricing model. OTAs and hotels who list their availability in Google Maps will pay a fee anytime a user clicks the link (sources say anywhere from 50 cents to US$2). If the user books a hotel room, a larger fee is collected based on the amount paid.

For the moment, it is still hard to know which impacts this new system will have on rooms distribution but hotels are monitoring closely the evolution. What is sure is that both hoteliers and OTAs are more or less worried...

Indeed, the question is particularly dificult for small independant hotels who do not have the same budget as the big hotel chains for these PPC and advertising system and that risk to be left behind. Moreover, if for the moment Google does not make pay the hotel for the access to direct booking, nobody can know what will happen in the future... Still, for the hoteliers, the main concern is that Google is not helping them with direct bookings for now and that competition with OTAs will remain hard, or harder...

As for OTAs, even if Google claims that it does not attend to conduct booking itself, who knows how it will evolve?

I personnally think it is a good thing Google added prices and availability to the information. Price is one key element when we are searching for an hotel so it seems logical to provide users with these data. Still, I agree that chances to benefit from the system are not equal among the hotels and independant hotels may have difficulty to compete... However, I believe that it exists other ways, and probable more efficient, to catch travelers' attention: networking and sharing on social media! Taking care of your community may be more rewarding than costly advertising campaigns.

Presentation in Community Management - Seth Godin or "The Remarkable blog of a Remarkable man"

Seth Godin The Remarkable blog of a Remarkable man

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Online exercise for the Think Tank: What will delight today's customers who are mobile friendly?

What will delight today's customers who are mobile

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