Some time ago I was contracted to assist a company in creating a strategy that would help them improve the acquisition rate of those who visited their website. A simple task after almost 20 years of executing strategies for clients who were interested in selling more products, to more people, more often, for more money.
Nonetheless, I ventured into this new project the way I would venture into all of my projects; with the goal of increased revenue in mind. I spent 6 weeks analyzing visitor behavior across the client company’s website. I analyzed bounce patterns and built persona’s from their best customers to start their segmentation process on proper footing. I looked at competitive sites, analyzed user experience, looked at new technology and how implementing it would further my client’s goals and improve customer satisfaction, and proceeded to reveal my findings.
Traditionally, revealing my findings was the most pleasant experience. Yes, it allows me to show off some of my smarts, and the hyper smarts of my team. I put together a thorough presentation with a solid mix of graphs and charts mixed with the critical reasoning behind what was happening to produce those results. I showed competitors, looked at demographics compared to marketing dollars spent and came up with a viable and sustainable solution. Again, that’s part of what I do, and why I’m hired. Have smarts, fully understand marketing and corporate goals, and of course, will travel.
Stop! This wasn’t going to be your run-of-the-mill project, and it didn’t take me long to figure that out. My first meeting with the CEO and CMO put a new quirk in my game. Yes, 20 years and I am still learning, not just about marketing, but about money.
I was presenting in the same building where Patrick Henry, George Washington, Benjamin Franklin, and even more modern figures like Rockefeller had spoken before me. I could feel the power of that history, and it showed on the smile across my face. I start my presentation with observations on markets, market share and revenue. These slides show corporate executives where we are, and where we are going. When I got the what is normally the best slide, revenue, I was stopped by the C-level team.
“Stop!”, they said. I looked back at my graph displayed on the screen, searching for a mistake. I was looking for an error, but I had been doing this so long, I had not realized what, if anything, I had done wrong. The answer was that I had done nothing wrong, but that my approach was wrong for their company. Baffled, I took a seat. “We cannot discuss money or revenue in our presentations,”. They told me that most of their team was comprised of scholars, PHD’s with the desire to teach the world, and grantors who ask for nothing in return for their charity other than the sanctuary project they seek to protect.
In shock, I went back to my area and held a postmortem with my team regarding the day’s exercise. I sat in a chair at the head of a conference room table. Some of my team were present on Skype, as was customary. I was silent and then stood for a few moments pacing a bit. I stopped and faced the whiteboard. Uncovered a green Expo marker, and wrote out a single dollar sign on the whiteboard. Their eyes squarely on the whiteboard, the team had no idea what I was doing. They shuffled through the copy of their sections of the presentation. Nothing. Nobody could understand why I had drawn a single dollar sign.
“What does it mean?” The first question posed by my Chief Analyst. The mathematician in the room was troubled by the lack of mistake on the slides. I informed the team that there were no mistakes in our numbers, but that we could not mention money in our presentation to the company or the team. Nowhere, no how, no way. Needless to say, the team was in complete awe. There were grumblings about the type of company we had engaged with, about leadership, and about why we were even called in. I put the team at peace that day, and later in our contracting, we were all put at peace from the complexity of our scenario. A peace we have now taken to every new client since that magical day. Yes, it was a Zen moment for us after so many years.
We presented to the client company team, and remained completely silent regarding revenue. No dollar signs, no financial graphs, no ROI’s, none of that. The leadership was pleased and we were given the green light to move forward with the project rollout.
Before we could start we had to backtrack a bit and did a full day seminar called “Why We Wake Up in the Morning”. Yes, we really needed to know what made the organization click since it was not shareholder equity. We had read the mission statements and understood the tag lines and customer commitment statements, but had no idea why each person came to work in the mornings. I won’t bore you with the details of the sessions, or how we run them, wouldn’t want to give up any trade secrets, but can tell you that it is very emotional and involves heavy amounts of tears. Yup, even my team and I cry during these sessions. Another Zen moment, but in this case for our client-company.
Once we knew what made them tick, each team member started along the path of developing world-class user experiences, tech simplicity modelling, consumer satisfaction, and other standard analysis we use to improve the company’s position. One by one, we analyzed every aspect of their ecommerce engines and assigned customer value points on each activity based on simple usability. We looked at the profile of consumers and adjusted them for the new reality of the middle class and working class demographic. We changed, adjusted, improved everywhere we could and then made our final presentation to our client.
Complete success. The client was extremely satisfied and the value provided to consumers increased two-fold as per questionnaires. The project was completed and we all went home.
Two weeks after completion, our financial analyst called my office and wanted to know if I had a moment to speak with him. We met one week later. He came to my office with his iPad, sat down, and after the formalities, he started to show me the final site review for our client. He walked me through the revenue numbers. Yes, I was sinning – all that revenue talk and all. He compared the initial revenue presentation we had initially presented to our client, you know, the one where I discussed ROI and revenue. He had apparently adjusted to the current financials based on what we created without taking into account money. A double-digit increase from our initial estimate. The change in our efforts from focusing on revenue to not focusing on revenue produced more success than we had ever imagined.
Soon after I took a long-needed vacation and reflected on the process we used to make such a tremendous impact on the client company’s bottom line. It turns out that with so much pressure by our traditional client companies to focus on short term results as measured by profit, and sustainability not of satisfaction, but of increases in that revenue month-over-month, we lost track of what really makes money (again with the word). Money comes from the focus on satisfaction, not from cost cutting and the endeavor to make more money. Today we have replaced many of our words from revenue, money, dollars, to empathy, happiness, satisfaction, and enjoyment. Each description goal paired with a graph that details the increase in each and of course, correlating it to revenue from improvement.
The results have been spectacular. If you are a corporate leader, I suggest you sit back and take a breath. Keep breathing. Now think about what you would do if money were not part of the mix of success. How would you create world-class customer satisfaction? Notice I did not use the word service – can you think of why. I think all executive teams could use a full day experience conference where we dig deep into the psyche of your company and team, and walk out of a room feeling human again and ready to earn more money than you ever have. Call me if you want to organize one. If you do, I am not going to do the session for money. You heard it, I won’t charge you my time, only expenses. I want to help you shed some light on what you are missing and how to find your true north, one that will help you earn more money than ever before, but not as a primary focus.
I hope you found this story enlightening. Go ahead, take your shoes off and walk barefoot across the grass on your corporate lawn. Oh, and take your team with you. Now breathe again and be happy.
Victor Bao | email@example.com | Skype: Victor.Bao
It is with great frequency hotels and resorts ask us to help them put marketing and customer service solutions into Standard Operating Procedures for their staff to follow. While we understand the importance of procedures in the back-of-the-house, we find a need for flexibility on its use in the front-of-the-house. I want to clarify, this is not about production SOP’s and Six Sigma, this is about forcing processes on customers.
Standard Operating Procedures Mapping
When Valorem Group approaches the creation of SOPs for clients, we start by following the guest journey and connecting the dots along the way to key internal positions that are key drivers of customer satisfaction. We look at the breakdown in repeat booking ratios of unsatisfied guests and analyze their dissatisfaction. In 67% of the cases we have studied, we can peg back dissatisfaction SOP’s. Yes, the typical escalation processes for improving service are really destroying service, loyalty and the lifetime value of customers.
While this discovery process seems simple, it takes time to rebuild the right procedures, and even more time to create the strategy to eliminate procedures. We find that many companies with reduced staffs have limited time to look at the perspective from the outside in or from the inside out to establish the best and most sensible operating procedure. Companies simply call on their employees to create the processes and procedures. While staff is excellent at working to produce requests from their leaders, they may not be as proficient at mapping the internal value chain and allocating the right steps for the right resources. In most cases, the staff simply doesn’t have the full range of internal visibility or the clear perspective of the customer’s personal value chain to determine the best approach to deliver service based on needs. Yes, we are saying it; there is a huge gap between internal mapping and external mapping, and we find that we create policies that usually don’t satisfy customers but do satisfy the immediate need of managers who cannot themselves create proper SOPs.
Standard Operating Procedures that work
We have tested procedures using real guests, real staff, and this is what we have found:
1. Based on observations at each touch point, both internal and external, most written policies are barriers to guest satisfaction and add frustration for internal players who had no input in the co-creation of procedures.
2. The only solution is the procedure itself, and how it satisfies management with no regard to internal or external customers, value chains, or satisfaction. In such a collaborative corporate environment, we bypass the team for the sake of speed demanded by managers.
3. We find that when the Directors request continuous SOP’s be written, that it becomes clear to the staff that while there is good “management” there is not real leadership. Why do we say this? The standard reaction for a manager if something is out of control is to create more process and procedures in order to manage the situation better the next time. At the executive leadership level, vision, strategy, and reaching goals are the primary objectives, not battening the hatches on the ship for every wave. We suggest laying down a customer service vision based on common sense. What “common sense”? We find a key difference between managers and leaders in the case of trust. Manager’s don’t think common sense is found in the ranks, leaders trust the common sense of their staff.
4. How these procedures are communicated is lackluster and directive. In today’s highly engaging environments, it is common to see how procedures and processes break all the rules, and are one way streets directed by employees on other employees. Collaborative mapping is never an option in the case of a time-constrained environment.
5. Bad procedures are always communicated to guests whether, directly or indirectly, giving guests a worse experience than the one they are probably complaining about in the first place. We shot ourselves in the foot with an abundance of SOP’s that make dealing with our brands intricate at best.
6. By setting up excessive SOP’s we eliminate any use of “common sense”. From our observations, those companies with tight management see a reduction in motivation and in the use of common sense always referring to SOP’s in lieu of thinking. The lack of motivation in a procedure-driven company is at least 28% more than in less procedure-driven companies. Yes, they are less motivated the more processes are instilled. Employee attrition is higher, even in a time or low employment, and guest satisfaction is lower, with customer loyalty 21% lower due to constraints placed on guests to reach satisfaction.
7. The most challenging thing about procedures is that it is a huge tradeoff for revolutionary thinking and action. Procedure driven companies are evolutionary not revolutionary. Imposing constraints keeps employees thinking inside the box and increases the topple rates of companies, even those that appear clear market leaders today, tomorrow will fall. Do you think IBM, Microsoft and HP are revolutionary? How long do you give them? Is Apple evolutionary or revolutionary? Test it. Call each with the same complaint and gauge your level of frustrations. Yes, you can almost certainly peg it back to the blocking of satisfaction through constraining SOP’s. Are you revolutionary?
8. Procedures focus on reducing risk, eliminating the sporadic wins that produce high revenue and increase market share. We are creating process-driven companies that turn out to be mediocre and will “lead” [in it’s manager’s heads] but always from behind.
The Standard Operating Procedure Solution
The solution is to analyze the custom journey, the solution needed, why the SOP is being created in the first place, the result of the SOP, and then map internally collaborating in building a world-class guest service experience. Or, you could create a world of procedures and put an end to loyalty and profits. You decide.
Read more articles about resort marketing. Want to get your SOP’s focused on providing the best guest experience? Want to have a greater lifetime value of your customer? Contact us at 617.939.9698 for info, our first consultation is complimentary.
Hotel Customer Loyalty: Who to reward new customers or loyal ones?
Hotel customer loyalty programs can be very tricky. Many of our hotel clients ask us which customer we think they should reward: new ones or current ones. Today, many hotels and resorts reward new customers as way to generate trial to their product, with some rewarding only those loyal customers who stay often at their properties. When considering adding a loyalty program for your hotel or resort, the question is which one of these strategies to pursue, either rewarding new customers or current customers.
The answer, just like most things, is “it depends”. Why it depends? Because every hotel has a unique scenario. However, we can provide you with a little guidance with two simple scenarios you might have and help choosing the right customer to reward in your loyalty program.
Two Camps of Thought about Customer Loyalty.
At Valorem Group we have two camps of thought about loyalty, the Business Camp that suggests that those customers who repeat often are in love with the hotel’s services and amenities, and that s/he would be willing to pay more for it, making discounting a decision that will negatively impact the bottom line. They believe that only new customers should be rewarded to generate trial and that current customers should be awarded little in the form of rewards other than low cost upgrades.
The other camp is the Loyalist Camp that believes that the only way to maintain a client is by offering them perks that keep them spending more money, more often, for more products/services. They claim that discounting leads to a loyal customer with a lifetime value that positively impacts the bottom line in the long term, and that new customers should not be rewarded without proving loyal habits. They claim that rewarding new customers only decreases the value of patronage to your loyal customers.
Two scenarios to help you decide whom to reward.
We think that both camps have valid points, but that the validity of the points depends on the hotel and resort’s competitive landscape. Lets first cover the two simple scenarios that hotels and resorts are very familiar with to help us decide whom to reward: 1) Hyper competition. We hear about it all the time, more hotels, more inventories, more options for the consumer and more tools which keep consumer focus on price. 2) A small concentration of customers that repeat often and produce most of the hotel and resorts revenue. Yes, it is the famous 80/20 rule, where 20% of your customers produce 80% of your revenue.
Discount in Highly Competitive Markets.
The rule of thumb is that if you have a highly competitive environment, you discount to new customers. If you have low competitive environment then you don’t discount to new customers, yet focus on loyalty. That should make sense to industry players who might have been at a resort in a not-so-popular area, and as more inventory comes on line have seen ADR and RevPar come down in an effort to drive trial to their resorts. Imagine for example the first hotels in Cancun and compare it to today’s hyper competitive arena. Hotels and resorts are clamoring for new business [heads in beds] and for that are continuously offering discounts for new guests.
If along with a large competitive set you also have an equal-spend-customer, meaning that every guest spends the same amount of money at your resort or hotel, then we see the path of rewarding new customers as optimal. Remember, offering rewards to frequent-stay guests will not ensure a repeat visitor if there are many low priced options from competitors in your market space. In these two scenarios, discounting to NEW CUSTOMERS is the absolute way to go.
High Competition, Low Concentration of High Paying Customers.
If on the other hand you have a high amount of spend among a small percentage of guests [the 80/20 rule exists], then you only discount to your most loyal and profitable guests. Yes, this means you measure the amount the dollar spend of those guests to make sure they are your best customers. It also means you gauge the amount of services that they consume on and off site and debit it to from their total spend [to make sure your margins are not already at an all time low].
When Your Loyal Customer is a Drain on your Budget.
Have you ever had that loyal customer that absorbs most of your front desk personnel’s time and that of the hotel wait staff , who returns more food then s/he consumes, and cancels their reservations more often? All of this is cost and should be tallied as a debit to that customer’s loyalty algorithm to ensure that you are not spending all of your staff’s time on one very loyal customer (unfortunately). Many ask us if they should “fire” their best clients, and we always say “NO WAY”. You should reassess their real costs and charge them more. Yes, charge more and provide little if any loyalty rewards for a return visit. We suggest you don.t tell them, just do it.
Are loyal customers really loyal?
One thing to watch out for too is the loyalty rate of your most faithful customers. So before you whip out the Perma Perks program for Mr. Smith, make sure that Mr. Smith’s company offices aren’t next door to your hotel and that he will stay there every time he is in town versus commuting 45 minutes to get to work in the morning from an alternative hotel. Make sure you are not on the way to the airport and that Mr. Smith doesn’t come in for a meeting and next morning move on to the next country. Make sure Mr. Smith isn’t an investment banker and that your hotel doesn’t already offer him/her a great image in the community. His rewards may be different. Everything must be looked at and the right program designed.
We suggest you break down your guests not by the amount they spend and number of times they visit you, but by the different types of customer “personas” carefully reviewing their needs and what provides them with value. Go ahead and reward differently for each group. Forget Gold, Silver and Platinum, segment by clusters, kind of like teams, and fulfill their needs. Maybe the investment banker needs a special table in the lobby that is reserved for him during his stay. That wont cost more, but is a huge advantage to him during his business trip.
One more note. Now that you are segmenting and rewarding, please segment internally. What I mean is, please don’t have any reservations agent respond to your most profitable clients, have a special and empowered employee handle those calls, nothing can be worse than being a top customer of a rewards program and then having to hear a customer service representative provide you with no solutions to your simple needs. Internal segmentation is critical for success of any real loyalty program. We will discuss this option in further posts.
Want more tips about how to market your resort, simply log into the Tips and News Section of the Valorem Group Website. If you are searching for corporate incentive programs and want to work with one of our partner hotels to create a corporate incentive program that will increase your bottom line, contact us at firstname.lastname@example.org
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“Way back in 2008”, the Vice President of our analytics group spoke at a corporate meeting about marketing strategies for 2014. He said “We were all continuously saying”, he continues, “it’s all good”. “Today, we no longer use the 2008 phrase, but we continuously compliment every action taken by anyone inside our companies no matter how insignificant. We see emails back and forth about how amazing everyone is and how hard we all work, then we sit in long budget meetings to talk about how we are not making our numbers”. He concluded.
How does that happen and who is to blame if anyone?
Is it marketing’s fault? Did sales mess it up for us? Was it the economy, more inventory on the market, price cutting by our competitors, or can we simply blame it on Obama’s new Affordable Care Act? The answer is nobody inside our company really knows. The reason we don’t know is because we spend little time analyzing failure and all of our time commending each other for a job well done. While we do not suggest stopping the flow of emails regarding a job well done, we also suggest investigation into the continuous crisis discounting and the number of incidences of these types of activities.
We created an Incidence Index to help guide our marketing and sales efforts. The index is a chart that details the number of times in one year that we have crisis discounting and track increases in these activities. We have noted a considerable increase in the use of crisis discounting or pricing over the last three-year period to the point where crisis discounting has become part of daily life at hotels and resorts.
The Valorem team tries to understand why bad things happen and how often they happen. Is it normal to have crisis discounts across Online Travel Agents 24-48 hours prior? If so, should the meeting atmosphere about not making our numbers really be a nice meeting about what has become standard operating procedure? If sales are down, then automatically open the flood gates by reducing prices. Cant we put this into our Pallisades program and let it run without holding continuous meetings to scold sales for their inability to make good on their plans?
What we have noticed over the last five years is that while marketing creates those beautiful and amazing marketing plans, which we all praise, with amazing strategies to grow and increase revenue embedded, the effectiveness of the plan is low.
In our Valorem Group offices we have two camps of thought, one that believes that it is the process of writing a marketing plan and the other that believes that it is the use of a plan in a flexible age. The first camp simply states that little time has been put into thinking about the best plan while the latter is concerned with the inflexibility of the plan.
While we wont bore you with a discussion about these two, we do want to go back to measuring failure as a path to success. We have measured the incidences of price decreases within 24-48 hours across a three-year period and have noted considerable increases in most of the companies analyzed [see, we used the word increases which is a positive word, to refer to the rate of failure, which we think you should send us a kudos for].
So to get down to the grain of it all, we take existing marketing plans with elaborate calendars and match it to the incidences of price decreases in a crisis mode. We analyze the cost of the marketing action, whether advertising, email campaigns, etc., and then identify those marketing practices which have had no impact on reducing the number of crisis events. We identify the weakness in the marketing plan and come up with solutions that will work. That doesn’t mean throwing solutions that have always been thrown at a problem in the past, it means giving some long and serious thought to activities and results based on your company’s Incidence Index. If you set as a goal to reduce the incidence of crisis discounting, you would be better off than setting the goal to increase revenue.
We then help marketing gurus get their groove back on by opening the doors to a broader look at the market and competitive set. The competitive strategy of price cutting is standard and we should plan on it, not use it as the excuse after plans fail. We need to prevent and establish countermeasures without competing on a lower price point. We stop and consider increased room inventory counts in our areas, competitive new market entry strategies, new airline lift in or away from your area and other market components that will always affect your plan, but are considered with less frequency.
We suggest you start your own incidence index at your property and gauge the effectiveness of your planning. If you want some ideas, reach out to us at any time. If you would like to see more tips about marketing, please click here http://valoremgroup.com/tips-news/
Social Media Tips
Here is the most frequent request our customers make of us: “Please give us some tips on how to get our social media community more active”.
While a lot has to do with the current social media brand voice and social media positioning, there are a few things you CAN do to get your social media friends to upload more images of your brand, product and services.
The simple way is to give them something to talk about! In the case of our hotel and resort social media clients, we try to have them create unique onsite social experiences. How can they do that? Here are three ways:
We have a slew of simple-to-execute tactics on how to get more people posting more images of your property more often without having to pay them.
To see more tips about marketing, please click onto http://valoremgroup.com/tips-news/
If you would like to contact us, please click here
Marketing a resort – Defining your competitive set.
I have been asked to create an almost step-by-step game plan in the development of a marketing plan for resorts, and am going to make the attempt. I have been teaching 4th year Marketing Strategy and Entrepreneurial Marketing at Florida International University for 10 years as well as two years at the University of Miami, and while I will always recommend taking a marketing course, I will try breaking this marketing plan process into several postings so as not to bore anyone.
Before we dive right into the resort marketing plan, there are a few things to consider, of which how to define your competitive set is crucial:
What happens if you mistakenly create a bad competitive set or a broad competitive set: The following happens:
Sound familiar? I see it in too many cases. It’s fairly simple to discover who your competitors are. I suggest a simple exercise as follows:
After this exercise you will know who your competitors are and what makes you different. From that you can start building your SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, which is really the first step in a resort marketing plan. I think however that I will spend a little more time in the next few postings dedicated to customer focused strategies and the profit impacts of dissatisfaction.
Stay tuned, and please ask as many questions as you like even while remaining anonymous.
If you would like to read more about marketing plans and strategies, please log onto http://valoremgroup.com/tips-news/
If you would like more details, please feel free to contact us at http://valoremgroup.com/contact-us/
How to Market a Resort
While we all try to avoid talking business during social dinners at the home of friends, it is evermore frequent that we get asked the most popular question: “What could I do to market my resort”, traditionally ending their sentence with “without spending a fortune to do so”.
While every scenario is different, we have decided to compile some very simple elements yet essential elements of an affective marketing plan for hotels and resorts.
As always, we will supply industry partners with more detailed plans or the with the support services needed to execute world-class marketing plans to expand your hotel and resort’s footprint.
1. Train and motivate your sales force. We have found that motivation can be as simple as awarding your sales person a Friday off for the closing a much needed group or incentive program, or telling them the more they close the more marketing dollars you throw behind helping them generate more leads. These can be:
a. Hire temporary support by contracting a telemarketing service while your sales people are traveling, working trade shows or operating group functions.
b. Design a tradeshow plan to secure more exposure for your sales team and therefore generate more leads. Most resorts don’t use a plan, their “plan” is to show up and to have material to give away, little is done to attract people to hotel and resort booths.
c. Make sure your sales team has ample face-time with their top clients, with so many competitors getting in front of your clients even if only online.
2. Email blast. Yes, email still works, but only if you do it correctly. Segment those clients who travel in a specific season by offering them perks for only those periods of time when they travel. Pay attention to guest moves across your website and when asked about specific information for your onsite spa or amenities, don’t send them emails about your snorkel excursion focus on creating a plan for what your customer wants. Personalization is key.
3. Use social media to stay in front of your meeting planners and customers. Before you start your social campaigns you must make a few decisions on which channels will best reach your specific target. You don’t have all the time in the world and your clients aren’t on all channels. See our other articles about social media specifics.
4. Search Engine Optimization. We have all heard this a million times, but it is a critical component if you are to generate leads. In the past companies executed key word analysis and then attempted to change things across your website to match those key words. See our other articles about SEO planning.
We hope this gives you a little insight into what is needed to market your resort. At Valorem Group, we help hotels sell, market and create the best content plans for their audience. There are affordable plans for resorts of all sizes and you can select one or all services.
If you would like to read more marketing plan tips and news, click onto http://valoremgroup.com/tips-news/
Contact Victor Bao at email@example.com or call 786.546.2778.
Restoring Group and Incentive Fortunes in Today’s Business Environment.
For a little over four years we have watched many of our hotel and DMC partners focus on cost-cutting activities across their organizations in order to hold on to cash in uncertain times. Cost cutting became the “new” old strategy used to reach their goals.
Since most General Managers and executives had not lived a recession of this magnitude, they quickly searched through their memory banks and latched onto a familiar strategy: cutting wherever possible. Cut marketing, sales people, support staff and even c-level suite positions. Marketing and sales staff worked in a permanent “triage” mode handling a multitude of tasks with as much speed and efficiency humanly possible. This left teams in complete disarray and now executives must consider the Post Economic Stress Disorder (PESD) this recession and job cuts will cost them when they inevitably transition to a sales strategy for growth.
With this apparent shift from cost cutting to growth, the main question is whether executives should dive back into the familiar sales and marketing efforts in a new era, or do they reinvent the entire sales and marketing process. Since no substantial thought was used to solve the economic woes of companies in 2008, I am fearful that no real brainpower will be used to reevaluate the sales process and marketing strategy for the years to come. Some say “if it isn’t broke, don’t fix it”, but it is broken and it is time to fix it.
That being said, I offer a few quick observations for hospitality leaders to consider before they move forward on growth plans and strategies.
What’s the solution? It’s time to rally your troops. These crisis years have taken their toll on your team and they may not be ready to fight in the new battle ahead. You must eliminate their nervousness, their guilt from having remained while their colleagues were let go, and remove their anxiety. How? Reinstate a training program, organize an effective retreat, involve them in change and reward them (using simple rewards) for their conscious efforts.
It’s also imperative to reevaluate the way you lead. A good exercise is to make believe that you have just been hired to do your job. What would you do differently? Now go ahead and do it. Past methods will not produce great results in the years to come so forget them and start anew.
2. Break away from past year’s blueprints. Yes, in order for you to transition from cutting costs to growth strategies you must reinvent the way you and your teams operate. Start with candid conversations about what you have learned about your customers, your service and your real shortfalls as a hotel or DMC.
Your first plans should not be market plans, but plans on how to regain your footing with the new customer sentiment. Don’t forget, you have gone through changes and so have your customers.
3. Reevaluate your competitors. Yes, you knew them, but lost track of them over these years while you were busy cutting costs. Take a good look at their entire sales and marketing structure. Are they less competitive because of a reduced staff? Did they not cut back staffing at all? Is their service worse or is it now better than yours? Has their price point changed?
Take a careful look at your market share and see which competitor has walked out of this recent war with the most amounts of victories. Understand your new situation before you start charting your course.
4. Interview your clients. Yes, it has been some time since you have engaged your clients and asked them what they would change about your hotel, its amenities and its service. Know that customers have moved up and down the star rating line so analyze which ones moved from a 5 star property to your 4 star resort but without changing their deluxe expectations.
Consider changes in customer migration patterns as they moved around the U.S. searching for new jobs, relocating to affordable areas, etc. Check the gender of your current consumer base. At one of our client properties we pulled a full data feed from customer check ins and discovered an increase in women as business travelers of 12% making them the dominant guest while all marketing plans still catered to men. It is not time to step back, but to step forward with clarity.
5. Plan differently. Most plans are created in sync with the hotel’s fiscal year or calendar year to better understand the year’s budgetary needs. This year you will need to develop an annual budget, but want short term gains from this long term planning. It isn’t going to happen unless you change the way you create plans.
We suggest you not write a plan. Write everything that your team believes will impact sales throughout the year on a long list. Put these activities into a “backlog” of items. Now that all items are listed, make sure that costs are associated with each activity along with a quick ROI figure (yes quick ROI). Have your team tell you what they will take from the backlog list and execute during the next 30 days. If one person decides they will go on a sales blitz to say New York City in the next 30 days, ask the rest of the team how they are going to help him make that trip as successful as possible.
Perhaps one person will help make appointments, the other will send an email to people in New York they have had contact with and one will set up a breakfast training at a high-end agency. The key is to generate a tactical plan where the entire team is engaged in the attack. No war was won without all elements of front line soldiers combined with back end services and support.
Our message is clear: generate renewed energy to fight the battles to come and do this by motivating your team, changing the way you plan and lead, and understanding your new competitive set, market positioning and demographics.
Victor Bao is a Fellow of Valorem Consulting Group and a Professor of Marketing strategy at Florida International University and a Professor of Market Research at the University of Miami.
Improving your group and incentive sales
Improving your group and incentive sales to the U.S. Meeting Planner and Incentive Houses is as simple as it is difficult. We have been the liaison between international hotels, their sales teams, and the U.S. Planner for nearly one quarter of a century and understand the gap between cultures, expectations and deliverables that impede effective sales efforts to outbound group and incentive programs from the United States.
Most sales people are always in continuous touch with their accounts, but we ask why then do they lose the business? How much business are you losing without even being aware of the reasons why?
Here are a few pointers that may help you and your international hotel or resort.
I can’t tell you how many times meeting planners tell me that they don’t know if they should even expect a response because the hotel they sent the RFP to never even acknowledges the receipt of their RFP.
It is very commonplace for hotels that CANNOT accommodate the group because of date availability, size of group, lack of meeting space or inadequate function space to simply not respond to the Planner at all. Not even a “courtesy email” thanking the planner for thinking of them and advising them that they cannot accommodate their request. Communication, courtesy & hospitality should always be part of the sales process even if the hotel/resort cannot accept the group.
2. Late responses.
Let us start by saying that while a great many hotels already respond to RFPs in a timely manner, many do not and the General Management is unaware of this occurrence. While we understand that hotel and resort sales people are very busy traveling, in long meetings, taking care of customer requests as well as the needs of General Managers and other Executive Committee members, they must understand that the U.S. meeting planner is pressed by a variety of other requirements, including time. A standard response is a maximum of 48 hours and of course after acknowledging the receipt of the planner’s proposal.
3. Incomplete & Unformatted RFP’s.
In many cases sending an incomplete response in many cases is even worse than not responding. It takes Planners time to read the partial replies only to have to make further requests that more often than not, go unanswered. If a Meeting Planner requests information about meeting space specs, banquet menus, and for the hotel to complete a specific RFP questionnaire, the least the Sales Manager MUST do is to provide the full and accurate information, fill in the questionnaire, and return it within the specified 48 hours! Planners will not consider a hotel’s standard proposal formats if they have sent you a specific questionnaire and your hotel will not be presented to their client. Many planners use specialty software that scans these FORM responses and sorts them for simple and quick presentation to their clients. Sales personnel may think they are providing the Planners with at least some of the details needed, yet they are not.
4. Language and customs.
While many international hotels have been hiring English-speaking sales managers, there remain many idiosyncrasies and literal translations from Spanish, Portuguese, French or other languages that simply do not make sense in English. It is very important that each hotel have a native English-speaking professional read through their current proposal templates for accuracy and clarity so that Meeting Planners do not have to decipher the offer being presented, often requesting clarification. Planners are not ignorant, they are just confused by unclear English templates and different customs in countries where they may not be as well-versed as in the US.
Since the downturn in the economy, the ability for companies to plan and budget for a meeting or conference is left to a late priority. The decisions on the venue are based on a series of factors:
5. Room to negotiate.
It is a common misconception among international hotels that there is always room to negotiate. Many times hotels start off quoting rates that are way higher than the client’s stated budget, and/or they do not provide most of the concessions/value added items requested by the planners. Later, upon follow up with the planner, they find out their property has been ruled out because of some of the above reasons, when it is already too late! Please, if your proposal is your “best offer”, by all means go ahead and present it, but if you know that you have room to negotiate, please be forthright and extend what you can offer from the beginning…don’t wait until it is too late and your property has been already ruled out to react!
Make sure your proposals, contracts and documents explain succinctly what you can and cannot offer. We recently had a client contract with a property, plan all meals, activities, work on BEO’s, and two days before group check in found out that the hotel DID NOT accept credit cards for master account payments, only payments via wire transfer or personal/company checks. Can you imagine? To say the least, this situation certainly put the meeting planner in a pickle! All because within the contract, it never stated that ONLY wire transfers or checks were accepted and that credit cards were not.
This article was written by Michelle Anseeuw- MBA, CMP, CHSP, Vice President Global Sales, Valorem Group.
Automotive Market Trends
This is an excerpt from a full report for a VTG client. Some statements may be incomplete because of this.
Overall Market Highlights
Overall market growth is subtle, but provides visible signs of recovery. Traditionally growth was detected by increases in consumer spending, housing and construction. The new economy has turned those signs around and growth is being seen and maintained by the production side with manufacturing and business investments leading the way driving down unemployment numbers. Retail, transportation and insurance grew for the 25th month in a row and if manufacturing continues along its growth curve, we should see an impact in consumer spending. While employment has seen a ver slow increase, in Florida we have seen a decline with emphasis on South Florida with most decline. Consumer confidence has however increased over the recent months. In sum, the market is expanding which we needed to confirm prior to presenting this proposal.
Automotive Industry Highlights
Ford sales grew by 10% in December from a year earlier and Chrysler sales in December 2011 were 37% higher than in 2010. The industry has seen a slowdown to sales of 10 million cars in 2010 down from 17 million in 2000 and 13 million in 2008. With new Gen Z entering the drive markets however, industry CEOs predict an increase to 14 million in sales by 2014.
Car costs have increased, only being offset by very high incentives. The industry appears to be training consumers to look for high incentives as part of their shopping process, reducing the effects of branding and drives traffic to dealers of consumers with no room in their shopping cycle for on site negotiation. A specific price is requested and consumers do not move off that price.
Credit is also creating a barrier to sales. Standard consumer credit is low and its availability is reduced. This means that even with line 5 approval there is little space left for the sale of Driveit. According to the dealers, there is little room for even traditional added amenities such as GAP insurance.
According to Toyota of Hollywood and Kendall Toyota, the markets are tight and consumers arrive asking for the specials not interested in hearing about any added offers.
While there is no style of car that is linked to demand of Driveit units it does coincide the sale of the most popular vehicles such as the Camry.
Companies like Toyota are making continuous investments in new models such as the Prius,
According to the dealers, the average age for consumers who buy Driveit earn about $40,000 and are 40 years in age.
Traffic comes from the entire South Florida terrain based more on where the dealer ads are placed. Kendall Toyota farms south into south Dade and Homestead and Toyota of Kendall farms in the entire South Florida terrain pulling a large percentage of their clients from Boca Raton.
While the demographic is different in each area, there was some similarities. First, a good percentage of consumers are Spanish speaking, If this follows Miami Dade statistics, 65% of consumers are Spanish speaking with 52% not having been born in this country. secondly most are connected to the internet via their cell phones as smart phones have become an essential for even the poorest of customers.
For the first time in the automotive industry there are 5 generations that will be buying cars during between 2010 and 2015.
Estimates from Toyota are that 2.5 million new drivers from Gen. Z will be buying cars annually. Born between 1995 and 2000 there are 23 million Gen. Z generation targets. Gen. Z grew up on iPods, text messaging, Facebook, smart phones and YouTube. They are coming of age publicly on the web, are true multi-taskers and have a no-holds-barred attitude about blogging and digital publishing.
They enjoy instant gratification are good at processing information that they will open doors we can only knock on today,
We will research to clarify the current positioning of GPS products and insights from target segments to build a marketing strategy for communications that will put a company on the “shopping list” for all target segments.
Data From OnStar Studies
According to a Forester Research study, 40% of consumers would pay more for emergency and roadside assistance services.
Willingness to pay diminished for all categories of in-vehicle technologies by 25% to 50% when consumers were asked to pay for the services separately instead of as part of the vehicle purchase price.
Women were 26% more likely to want in-car navigation systems than men, and they were also more interested in hands- free cell phone options.
The same survey revealed that while the affluent certainly purchased luxury vehicles, on balance they planned to buy more Fords (26%), Chevrolets (18%), and Toyotas (12%) than Mercedes-Benzes (7%), Lexuses (5%), and BMWs (4%) in the years to come.
Still, interest in vehicle tracking devices tended to be higher on a percentage basis among those who purchased more expensive cars, though not universally so. For example, of the 5% of affluent car owners who purchased a Lexus, approximately 75% were interested in paying more for a vehicle with GPS. In contrast, about 45% of Toyota, Chrysler, and Oldsmobile buyers said they would pay more for that option.
Want to know the solution to improving your strategic position for after market products? Contact Victor Bao at firstname.lastname@example.org.
About The Contributing Author: Victor Bao is a seasoned marketing strategist with decades of experience in the automotive, hospitality, retail and consumer goods industries. He has lived and consulted in several countries including U.S., Spain, France, England, Italy, Colombia, Brazil, Argentina, Guatemala, China and India. He has also taught Marketing Strategy and Market Research for 12 years at Florida International University and the University of Miami.