Salespeople play a pivotal role in the dynamic world of the hotel industry.
NB: This is an article from Demand Calendar
They are the driving force behind room bookings, event sales, and the establishment of profitable relationships with corporate clients, travel agents, and tour operators. Their job is not just about selling; it’s about selling the right mix of products and services to the most profitable customers, maximizing the hotel’s profitability.
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However, the path to successful and profitable sales in the hotel industry has challenges. Hotel salespeople need help meeting sales targets, maintaining profit margins, finding new clients, and managing expectations. Add to this the need for coordination with other departments, the high turnover rate common in the industry, and the complexity of their role becomes evident.
In today’s data-driven world, salespeople face data availability and accuracy challenges. To succeed, they need a comprehensive understanding of their products and services and a deep understanding of their customer’s needs and preferences. However, they often struggle to gather and analyze this data effectively because they lack proper tools and systems.
In this blog post, we will explore the essential duties of hotel salespeople, the difficulties they face, and how various tools can aid them in overcoming these obstacles and optimizing their profits.
How can the salesperson become more profit-oriented?
The traditional sales job in hotels focuses on volume, revenue, and customer relationships. Rarely do sales think about or analyze profitability. However, in most hotels, sales must collaborate with revenue management to price contracts and meeting & event proposals to minimize displacement. This is a good practice to ensure that rooms and meeting spaces cannot be sold at higher rates to other customers. The first part of becoming more profit-oriented is to understand Customer Acquisition Costs.
Understand Customer Acquisition Cost
Customer Acquisition Cost (CAC) is a critical factor when considering profitability. It represents the cost associated with convincing a potential customer to buy a product or service, including research costs, marketing, and accessibility. Here’s how a salesperson could incorporate the concept of CAC into their profit-oriented approach.
- Efficiency in Prospecting: Salespeople should aim to identify and reach out to potential customers who are most likely to be interested in the hotel’s offerings. This can help reduce the time and resources spent on prospects who are unlikely to convert, thereby reducing the CAC.
- Effective Sales Processes: The more efficient the sales process, the lower the CAC. Salespeople should continuously refine their sales processes to shorten the sales cycle, improve conversion rates, and reduce the resources required to secure a sale.
- Leveraging Existing Relationships: It’s often cheaper to sell to existing customers than to acquire new ones. By focusing on upselling and cross-selling to existing customers, salespeople can generate more revenue without significantly increasing the CAC.
- Monitoring and Reducing Costs: Salespeople should know the costs associated with their activities, such as travel, entertainment, and partnerships. They should aim to minimize these costs, for example, by leveraging virtual meetings or negotiating better terms with partners.
- Digital Marketing and Social Media: These can be effective tools for reaching a large audience relatively cheaply. Salespeople can work with the hotel’s marketing team to leverage these channels for lead generation, thus reducing the CAC.
- Measurement and Analysis: Salespeople should regularly measure the CAC and analyze how it relates to the value of the customers they’re acquiring (Customer Lifetime Value, or CLV). Suppose the CAC is high relative to the CLV. In that case, this indicates that the salesperson needs to focus on acquiring customers more cost-effectively, increasing the value of each customer, or both.
By incorporating these strategies, salespeople can help to reduce the CAC, making each sale more profitable and improving the Net Revenue.
The most profitable customers and deals
Being profit-oriented in sales, especially in the hotel industry, requires a focus on the volume of sales or number of customers and the profitability of each transaction. Here are several ways a salesperson can become more profit-oriented.
