How Hotel Marketers Can Align Better With Revenue
Hotel marketers have a hefty mandate: keep the hotel filled while maintaining the right perceptions of the brand over the longer term.
NB: This is an article from OTA Insight
This dual role of putting heads in beds and protecting the brand can cause conflict, especially between marketing and revenue.
What’s really needed is a stronger collaborative mindset that better aligns marketing and revenue. When both sides strive to do more together, there’s a clear impact on the hotel: more profitable revenue, delivered more consistently.
To increase profitable revenue, teams must measure the profitability of individual bookings by using rich data on guest behaviour alongside pricing data. Since this data usually lives with both the revenue and marketing teams, there needs to be regular knowledge-sharing to unlock new opportunities and efficiencies.
To achieve this level of beneficial knowledge sharing, hotel marketers must do their part to drive this initiative forward. Here’s how marketers can contribute to better alignment with their revenue management colleagues.
Set the scene
The first step is to set the scene. Ideally, there’s an understanding (and an expectation) of collaboration already existing on both sides. Realistically, there are bound to be some silos and uneven information. It comes down to philosophy: revenue managers see pricing as their primary lever, analysing demand data and booking patterns to optimise rates, while marketers deploy advertising and promotions to optimise revenue in the direct channel. This gap often results in wasted effort from conflicting goals.
From the outset, identify and highlight the commonalities between marketing and revenue. While the teams may have different metrics and objectives, there’s overlap in the most important piece: your focus on building the brand and bringing in more revenue reliably and consistently over time.
Review your cross-functional collaboration, in which shared goals give teams purpose and momentum. In our experience with revenue teams around the world, common objectives lead to better outcomes in both staff satisfaction and overall revenue.
Revenue management is a team sport that requires finesse, communication, and clarity, says OTA Insight’s Global Commercial Manager, Thierry Collard, a panellist on our recent on-demand webinar on this subject:
“Successful revenue management takes close coordination across all areas – from marketing to sales to reservations – to build a holistic, strategic approach to optimising a hotel’s potential. By sharing knowledge and data, it’s far easier to outpace expectations.”
Once alignment has begun, the next phase is about solidifying trust between teams. This trust is what leads to success, and so it’s important to build bridges and nurture mutually beneficial relationships across teams.
Strive for clarity by discussing early and often
Mutually beneficial relationships start with a clear understanding of each side’s goals, expectations, and responsibilities. As such, clarity is a major driver of success in business. Organisations that report a lack of clarity are less likely to perform at industry-leading levels. While the cost is hard to quantify, some respondents to a recent study report that avoiding tough conversations can cost up to $7,500 in wasted employee time. Says Chris Myers, Founder of BodeTree:
“Clarity is a habit and like any habit, it takes constant reinforcement.”
To achieve clarity, one approach is to have early conversations, more often. The idea is to have lots of shorter, earlier conversations done at more frequent intervals. It’s not necessary to wait for a regularly scheduled meeting to bring an opportunity, request or concern to a colleague. While it can sometimes feel like such early outreach is also an overreach, the reality is that things move fast. The world doesn’t schedule itself around your team’s meetings. If the need is there, tackle it immediately. When you discuss early and often, you position the team for clarity and nimbleness.
Do this: Consider a rotating desk schedule, where at least one member of the marketing team sits with revenue periodically. Build the framework for informal collaborations and you’ll enjoy stronger bonds between teams.
Communicate clearly and consistently
The other benefit of early conversations is that it improves communications. Marketers must strive to communicate clearly and consistently. Whenever there’s a lack of clarity (whether due to infrequent or confusing communications), teams function poorly. Performance takes a hit.
Communicate clearly and consistently to ensure that everyone knows what’s expected of them. Regular communications is a mechanism for accountability, as it creates a reference point for tracking performance. When everyone sees the same signposts, it makes it much easier to know whether the team is on track, as a unit – rather than in silos.
Do this: Bring data to the regularly scheduled revenue/marketing meeting. Be sure to explain where the data came from, why it’s relevant to the group, and what it reveals. By clearly communicating the value of this data and analysis, you make a clearer case for further collaboration.
Reduce complexity by marshalling existing resources
Most organisations try to do too much. The consequence is that teams are stretched thin, and react to the growing complexity with structural attempts to rein in the chaos. Unfortunately, this very same structure can clamp creativity and make it much harder to meet revenue goals.
The key is to reduce complexity, rather than create more. To do this, implement an alignment initiative that relies on existing resources. For example, there’s no need to add another meeting to the books. A simple reframing of existing revenue/marketing syncs can make those meetings much more effective. Marketers also stand to gain from the analysis revenue managers already do every day, such as comp set monitoring and your hotel’s competitive price positioning. The key is to leverage the cross-functionally of existing tools and data sources, and pull this data into a unified view that can be shared among teams, says Collard:
“It’s very important to have an aggregated system that has both the internal and external data in one place. Then you need to make data accessible within the teams – and make sure everyone is comfortable using it.”
Do this: It’s not about doing extra work; it’s about extending the value of what’s already being done by both teams. Existing reports and analysis can provide critical insights, all without any additional work.
A list of data resources to use
Marketers are close to the guest, with an intimate understanding of their preferences, such as why, where, and how far in advance they book. The marketing team also segments guests into different targets and has the creative instincts to match message to segment and channel.
Marketing uses revenue’s demand, market and comp set data to refine targeting and improve marketing campaigns.
As a marketer, it comes down to sharing more with your revenue colleagues. Here’s some data and insights that marketers should share regularly with revenue:
- Guest personas. While these don’t change that often, it’s surprising how many hotels don’t make these personas a part of training for revenue teams. Marketing must align the organisation around target demographics.
- Guest preferences. Keep everyone up to date on who your guests are, as well as what they expect before, during, and after the stay.
- Guest reviews. To back up your personas and preferences, make it a habit to share recent guest reviews to identify opportunities for marketing and revenue campaigns.
Marketers should also be sure to consider the following data from revenue managers:
- Demand data. Each market has its own ebbs and flows, which evolve over time. Lean on your revenue colleagues to keep yourself appraised of these trends.
- Stay patterns. Understanding how far in advance guests book, as well as how long they stay, should underpin marketing campaigns. Without a clear understanding of booking window patterns, marketers may resort to panic discounting or have a marketing automation drip campaign that misaligns with average booking windows. Keep in the loop with revenue on these patterns – and listen carefully to any insights they provide around any shifting patterns.
- Booking evolution. Pricing trends for competitors mean marketers can more easily understand the competition’s pricing position. Revenue managers must also understand the booking evolution on their own hotel’s website, as pricing affects conversions, says Luke Terheyden, a solution architect at Hotelchamp and panellist on our webinar:
“Let’s say we see a huge spike in visitors searching for particular set of dates, but we don’t see many bookings coming through. This suggests that there’s something going wrong, perhaps with the pricing.”
- Business origin. This data is immensely valuable for marketers honing in on promising segments or drilling deeper on segments they’re looking to grow. If you know that Americans tend to book further out, you can collaborate with marketing on a targeted campaign that reflects these unique characteristics.
- Demand-based pricing. Since low-demand dates are easily identified in revenue management software, marketers should use these dates to target date-based campaigns or for flash-sales to boost demand for underperforming dates.
- Events. Both revenue and marketing teams can identify potential campaigns or offers that specifically target certain events. This information can also prevent marketing from inadvertently running a promotion during a period of high-compression, says Collard:
“Revenue and marketing must be aligned and using the same calendar, one that shows events and demand. This allows teams to work together to create packages around specific events, and avoid making mistakes that result in lower-than-forecast pricing.”
Other useful data that marketers should look to revenue managers to provide
- Pricing intelligence. Revenue’s dashboards visualise demand and rates by market segments, channels, source markets, groups, and corporate clients. A firm understanding of these trends helps marketers deliver more compelling campaigns. For instance, rising demand from a specific geography may indicate a need for a targeted marketing campaign.
- Local market demand data. Revenue managers use local market demand data to forecast revenues and set future prices. This data can also be useful to marketers, who can discuss patterns with revenue managers to get a sense of what’s driving demand: is it a geography, special events or a new hotel? Marketers can leverage this information into current and future campaigns.
- Comp set benchmarks. These highlight unexpected spikes for dips in comp set rates. These changes may suggest marketing opportunities – for example, if a nearby hotel is at full occupancy due to an on-property conference, a micro-campaign can target guests who can’t be accommodated at that hotel.
It’s no easy task to lead your marketing and revenue teams towards greater alignment. It’s also not a quick fix. Settle in for a longer-term initiative that lets trust build over time. There’s no simple way to accomplish the goal of complete alignment. Patience, accountability, and a healthy dose of celebrating successes will combine to make the most impact. Take your time – and have fun!