Part 2-These Digital Marketing Mega-Trends Are About To Turn Your Business On Its Head

In my last article, I made what I hope is a compelling argument that we are entering a period of profound change in consumer behavior thanks to the emergence of GenZ and the degradation of third-party data.  I talked in broad strokes about what you might do to protect against these changes or, better yet, take advantage of them.  Further, I hosted a webinar to go over these trends, and their alignment with economic conditions in 2023, and I encourage you to attend.

Indeed we believe that this change presents a tremendous opportunity for smart hotels to gain market share and win new customers, in large part because many in our industry will be caught flat-footed.  They’ll continue their marketing behaviors unchanged while wondering why they’re getting their butts kicked all of a sudden.  

Before I get too prescriptive of specific strategies to win going forward, I want to review and then introduce a visual model you are all familiar with - the conversion funnel.

This visual is useful in orienting your mind to the new paradigm in marketing … because it's flat-out wrong. 

Over the past decade as marketers, we relied on math (clickthrough and conversion rates) and the ability to target new customers on the cheap to optimize the above funnel.  We filled the top by buying inexpensive impressions from people looking to stay in a particular market.  We enhanced our chances at conversion by resurfacing our brands during the consideration and preference stages with all manners of retargeting.  And finally, we improved our chances of conversion in the intent and purchase phase by advertising for the name of our hotels or promoting time-sensitive offers.  Sounds reasonable?  That’s because it has been reasonable; and effective.  But the model is incomplete and inefficient, and those hens are coming home to roost.  

FLAW #1  The truth is, many marketers use the same message throughout the conversion funnel, regardless of the customer they are targeting.  They rely on the “frequency” of their message instead of the quality. Most hotels simply advertise their most popular package(s) through most of their digital advertising.

FLAW #2  Equally important, this model assumes the purchase as the end of the funnel, when the truth is, it's just the beginning.  As marketers, every purchase, every conversion in this model is given relatively equal weight (ADR * Length of Stay).  That's just not how you run your business.  You know who your best customers are; the ones who spend more money at your property or, better yet, stay more times every year.  In this conversion funnel, we as marketers treat all conversions as the same, because they all are just a single purchase.  We don’t identify and then try to find MORE of your best customers.  

These flaws are only exacerbated by the trends I mentioned in the first article. Simple, transactional messaging that relies on crazy levels of third-party data targeting and high-frequency advertising are the tools of yesterday, not tomorrow.  

At GCommerce, we’ve reimagined the conversion funnel as follows:

Notice that the purchase is not the bottom of the funnel, it's the second step.  The true bottom of the funnel is lifetime advocacy, which should better align with a hotel’s most valuable guest.  Marketing has a role to play in helping to attract and retain lifetime advocates, but it starts by understanding that our job is not to spend an outsized amount of our focus on the top of the funnel.

For example, did you know studies show people are most satisfied with their travel experience after they book but before they actually travel…that the anticipation of the trip is the most potent travel aphrodisiac?  Or that reaching out to and engaging with a guest after their stay is amongst the most effective ways to build long term brand loyalty?  Knowing that, how would you rebalance your marketing focus?

With the mega-trends as catalysts, it's high time that the industry takes a more holistic view of consumer marketing.  We contend that digital has a role to play all the way through this new conversion funnel.  Digital marketing can help build excitement after a customer has booked when they are most susceptible to brand messages.  We can help engage after the guest stays, keeping them connected to their experience.  We can encourage them to come back, and come back more frequently.  As they do, we can feed them great brand stories, solidifying their loyalty.  And finally, when these customers are passionate about singing your praises, we can give them the tools to do so more effectively.  Conversion is not a single, linear event.  It's a lifetime of interactions with a customer.

Capitalizing on Mega Trends For Your Hotel’s Marketing in 2023

With this new conversion funnel in mind, here are a few ways to leverage the mega-trends to your advantage as you work on marketing your hotel in 2023.  

• Map the New Conversion Funnel - Adapt the above conversion funnel to your specific property(s).  Take the time to detail the strategies, tactics, and budget you have assigned to every phase.  Chances are you will find a majority of your time and treasure are spent on the acquisition stage (the most expensive in the funnel).  Rebalance to reflect a more holistic view of the consumer funnel.
• Invest in Creative/Segmentation - Whether you are marketing to customers in the acquisition phase or trying to increase repeat visitation, make sure you segment your customers in obvious ways.  Maybe your segmentation is based on the purpose of trip, weekday/weekend travel or more detailed sentiments or experiences.  Please don’t feature the same creative regardless of segmentation!  Build story, creativity and relevance back into your marketing…your customers will thank you for it..  
• Build First-Party Database - Remembering that first-party data is marketing rocket fuel, it's worth revisiting every existing (and potential) guest touchpoint to ensure you are collecting the data.  At this point, I assume most of you are doing a great job collecting guest data at the front desk, but what about through other outlets?  What about through guest referrals or past guest digital forums that you host online?  When looking at each opportunity, are you giving people a good incentive to hand over their data?  Which brings me to…
• Provide a Data Incentive! - Why in the world would a past or future guest give you their data and the subsequent permissions required to use it?  Like it or not, this is a transactional relationship; they are giving you their data in exchange for something of intrinsic or implicit value.  Here’s an example to get you thinking - waive or discount resort fees for guests who join your loyalty program.  
• Install GA4 and Plan for Data Warehousing - Consider this a foundational step that you should have already made plans to execute.  The sunsetting of Universal Analytics and the emergence of GA4 has been a hot topic of late (we’ve been on it since 2021), but not many are talking about data warehousing.  Through Universal Analytics, Google would hold your data in perpetuity, allowing you to visualize year-over-year trends for all of your KPI’s.  With the transition to GA4, Google has implemented a 14-month data retention policy, meaning you won't be able to draw upon those year-over-year comparisons unless you warehouse your own data.  

Introducing Community Marketing for Hotels

The above tactics can and will provide you with a short-term advantage over your hotel’s flat-footed competitors.  But soon enough, that advantage will be eroded as the world catches up.  They are a good entree into the new paradigm in marketing.  At GCommerce, we have been thinking about what the most progressive, aggressive hotels and resorts should be doing to position themselves for success over the long term (5-10 years).

Given the scale of these digital marketing mega-trends, we believe there are strategies that reposition businesses for long-term structural advantages that can’t be replicated by slow-moving competitors.  The answer requires some more strategic thought that’s custom-tailored to your property, your positioning, and your location.  At GCommerce, we set out to develop a blueprint for our hotel clients that leverages the mesh point between the two mega-trends.  We arrived at the development of brand communities; not necessarily a new idea but one that we’ve modified to create incremental value in the face of these emerging trends.  Brand communities allow us to deploy more creative and connected storytelling, they provide a framework for marketing throughout the customer journey, not just during the acquisition phase, and they give us the means through which to collect gobs of first-party data.  In our experience, a community can be nurtured by just about any hotel that is differentiated in some meaningful way.  We’ve put this framework to work for several clients and the results have been eye-popping.  Clients not only enjoy increased engagement and real short-term returns on their investment, they are set up over the long term with a marketing advantage that can’t be stolen or replicated by their competition.  

Over the coming months, GCommerce will be sharing more about Community Marketing with our clients and in our writing/speaking.  We encourage you to reach out, if for no other reason than to review and track some of the use cases we are deploying.  We promise they are unlike anything else you are seeing from another hospitality digital marketing company.