Measured Marketing in Hospitality — Now there’s a Concept

There is an old adage by John Wanamaker considered by many as the founder of modern advertising that states, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half,” may have been quite true in his day, but times have changed.

The demand for increased marketing effectiveness coupled with tighter and tighter marketing budgets means hotel chains and individual properties alike must justify every marketing dollar spent. In order to do that, they must have the ability to analyze campaigns quickly and accurately to make adjustments where necessary to increase ROI. Of course agreeing where to spend those resources is another matter. But with accurate information, you will be ready to make those decisions.

If you are struggling to measure your marketing activities you are certainly not alone. According to an Accenture study, nearly three quarters of senior business executives in North America and the UK say that their company is unable to accurate measure their campaign ROI.

Part of the difficulty lies in clearly determining what data to track and what defined outcomes are expected from various forms of advertising. In the hospitality industry, responsibility for different areas of the marketing process can often be split between head office (of branded chains) and individual properties. For instance, brand recognition (awareness) is a key factor in building customer loyalty, increasing marketing effectiveness and generating first time guest stays. But much of the responsibility for creating brand awareness lies with corporate and not so much the specific property.

So when we talk about measuring marketing effectiveness are we talking about occupancy rates, customer satisfaction, loyalty, average room rate or all of the above?

For the sake of argument, let’s assume that your branding and awareness marketing efforts are well looked after by corporate and we will concentrate on your direct marketing activities to put heads in beds.

With the soaring Loonie and continued stagnation in the US market, simply looking at occupancy rates year over year may be misleading in terms of how well a campaign works, however, it will provide an indication of whether a particular market is worth advertising to or not. In this case, inbound inquiries to your property may be a better indication of the effectiveness of a campaign.

To begin to measure your marketing activities you must first start with a baseline. This may be statistics from a year ago, or it may be statistics from just prior to a campaign launch.

First, we must determine what we expect from the campaign and what specific action we want potential guests to take. For example, if we want to generate leads and inquiries from event planners and corporate conference organizers let’s first determine what we want those prospective clients to do; call an 800 number, visit our website, fill out an online form, etc. By determining a specific course of action, we can now accurately track the effect of the various campaign components.

What will often occur in an given campaign is that multiple media ads will be used to attract a response. Each of these should be given a unique identifier to track response rates. For example, unique 800 numbers can be used and tracked for various publications. If the goal is to drive traffic to the web, then your job is much, much easier than traditional media options.

Your website should have an integrated statistics package such as Google Analytics. If you’re buying banner advertising and sending electronic ads (newsletters etc.) your statistics package can track exactly where each click is coming from. Not only that, it can also track exactly what happens when these inbound visits occur. (what pages were viewed, how long they stayed on the site, what forms did they fill out etc)

With a comprehensive banner ad campaign, you can send visitor to unique pages of content clearly identifying to you through Google Analytics where each visitor came from. This then allows you to shift marketing dollars from ineffective ads and site to the more effective ones thereby reducing your overall cost of lead generation.

With a comprehensive banner ad campaign, you can send visitor to unique pages of content clearly identifying to you through Google Analytics where each visitor came from. This then allows you to shift marketing dollars from ineffective ads and site to the more effective ones thereby reducing your overall cost of lead generation.

With direct mail and print ads, you can use QR codes (those small square maze-looking ink blots) to send guest to a specific, unique web page not published in your website navigation. This means that any traffic to that specific page could only have gotten there through your print or DM campaign. The real beauty of this method is that you can track in real time, how your campaign is working. If it’s not meeting your stated goals, you can quickly change various aspects of the campaign (offer, price, media etc) before you’ve spent your entire budget only to find out it didn’t resonate with your guests.

Regardless of what outcome you want to achieve whether it’s increased occupancy, loyalty, guest satisfaction or average rate, setting campaign targets and then tracking your campaign’s progress will result in providing you with the knowledge to make adjustments and refinements which will ultimately reduce your marketing spend and will pay dividends to your bottom line. Now there’s a concept everyone can agree on.