You’ve heard it said millions of times before – it costs more to acquire a new customer than it does to keep an existing one. Five times as much, to be exact.
NB: This is an article from CartStack
While necessary, customer acquisition can add significant drag to the growth of your profits, especially when customer retention is not given the same attention. For property owners and hotel managers alike, the pain of an ever growing marketing budget is only worsened by a revolving door of single-stay guests.
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However, did you know that increasing your customer retention rate by just 5% can increase your profits by as much as 25% to 95%?
Of course, we all know that long lasting relationships with customers can’t be formed overnight. This leads many hoteliers to wonder how they can make such a significant impact on their customer retention rates, and what are the best strategies to do so?
Today we will be breaking down exactly what your hotel management team should focus on in order to increase customer retention and decrease overall marketing costs.
After reading this guide you’ll better understand how to:
- Maximize your customer loyalty
- Promote direct bookings to build stronger relationships
- Leverage technology to improve the guest experience
- And many more tactics to improve your customer retention!
Pre-arrival: Start an amazing relationship with your guests before they arrive.
Booking confirmation emails
In order to increase the amount of guests that remain loyal to your hotel for the long-term, it is always a good idea to make a good first impression. This can be done with an automatically triggered booking confirmation email.
Take your booking confirmation email as an opportunity to set the scene for the guest experience at your hotel. Some best practices for a guest-pleasing confirmation email include:
- Important information such as check-in and check-out times, date of arrival and address of your location.
- A map of your hotel and the surrounding area.
- Activity suggestions and sightseeing recommendations for guests to enjoy during their stay.
- Pro tip: If your hotel offers sightseeing tours or fun activities this is a great way to upsell your guests and improve their experience!
Prioritize direct bookings vs. OTAs
There are a few key reasons why hotels should prioritize direct bookings over online travel agencies (OTAs). First, direct bookings allow for better opportunities to build guest relationships. OTAs act as a buffer between your hotel and the guest, and though they can help you fill rooms faster, they’ll also get in the way of your guest relationships.
If a guest books through an OTA, and then enjoys a fantastic experience at your hotel, they’ll be more likely to remain loyal to the online travel agency. Why? Because the OTA was their first point of contact. First impressions matter when building relationships! According to a survey by ClickFox, 48% of customers say first impressions are the most important time to gain their loyalty.
When guests book directly with a hotel, they are more likely to be familiar with the brand and have loyalty to it. Second, when guests book directly, you’ll have the chance to further introduce them to your brand through follow-up emails and loyalty programs.