Personalisation and a mix of channels is the key to success
Paul Sumner, Communications Director at Go Inspire Group
City breaks, honeymoons, luxury beach breaks, romantic getaways – the list is endless on what is available to consumers, meaning it is getting increasingly hard for businesses in the hospitality sector to stand out in a crowded market.
In the past, marketers in the hospitality sector have relied heavily on email campaigns with 87% of them considering email to be the most effective channel to catch warm leads and turn them into customers 1 . Although direct email is a cost-effective marketing method which can bring tangible results to the business (such as a surge in direct bookings, an increase in customer engagement or an influx of positive reviews on social media) it certainly is not the only suitable channel.
Research carried out by Go Inspire Group shows that direct mail outperforms direct email, producing greater incremental revenue; results also show that a combination of direct email and mail outperforms each channel in isolation. Therefore, marketers should not underestimate the power of traditional channels; winning strategies include both direct mail and direct email working in tandem as only when combined do they produce the highest return on investment. But how can each channel be suitably optimised for its target customer?
Whether it is print or digital, personalisation is key; research focused on marketing in the hospitality sector shows how personalisation increases email open rates by 26% 2 , however only 44% of consumers believe that the communications they receive are in fact personalised.
To help marketers better understand the commercial outcomes of personalised direct mail, the second in a series of randomised control trials (RCT) carried out by Go Inspire Group focuses on an alternative – but more representative – marketing metric. Instead of looking at response rates and open rates, the success measure analysed is the incremental revenue generated per customer – net of campaign costs.
Different levels of design ‘vibrancy’ were trialled across a variety of segments, showing that increased vibrancy produces an overall incremental revenue uplift of 20%. However, this result doesn’t apply to all; vibrant designs have not been successful among the high value, high-loyal customers who ended up spending less. This key finding should make marketers realise that a good understanding of their audience is crucial for the success of personalised campaigns.
To prove this point further, the RCT also tested messaging and imagery tailored to recipients’ individual area(s) of product interest, historical behaviour and potential. The result saw a 128% uplift overall in incremental revenue – the highest increase observed – while the incremental revenue generated varied between product categories from 72% to 197%, showing that well-thought through customisation can drastically change a campaign’s outcome.
The mission for hotel marketers should be to ensure that their business is the first option for customers when they are booking a trip. To achieve this goal a good use of personalisation is essential; the more personalised the offer, the more likely it is to stick in customers’ minds.
Another key takeaway for marketers is that open rates shouldn’t be the only indicator taken into consideration. Those who use incremental revenue as a benchmark will have a better understanding and a true representation of their campaigns. Focusing only on inward-looking metrics can be misleading, preventing marketers from testing alternative and more effective strategies.
The analysis of the right metrics, the impeccable understanding of your audience and a strategic use of personalisation, are the key differentiators between a 3 star and a 5 star marketing campaign.
3 Econsultancy, How travel industry trends are fragmenting the customer journey, 16 July 2018