Your competititon can be your BFF

Hotels: your competition can be your BFF. 

For a while.

Right now, the hospitality industry is playing catch-up after months in the desert.

And the fact is, nothing can be more powerful or cost-effective for bringing guests back than marketing and advertising. Nothing. But with revenues down, money for that stuff can be hard to come by. And there’s the rub.

Why not join with some other hotels or resorts in town and pool your resources? That’s right, work with the competition. Even if just for a while.

You can save a lot of money. Because there are agencies out there who will work with a group of hotels or resorts in an arrangement where each individual hotel will pay far less as part of a group than they would on their own. Each with a share of an agency and the work it can do for them.

We’re one of those agencies.

We’re open to — and looking for — all sorts of creative arrangements. (It’s been an interesting couple of years for hospitality agencies, too.)

And let’s be honest. Y’all don’t really have any secrets from one another. You all subscribe to STR reports and your comp set isn’t exactly made up of strangers. Just don’t hook up with your direct competitors. 

Get together and sell the neighborhood — like downtown hotels or beachfront hotels. Sell a group of boutiques. Or put together a group that can sell the variety you and your co-conspirators offer. Maybe one of you is in Old Town. Another is on the beach. A third is in the heart of the restaurant district and one is an all-suites property. 

You don’t even have to actually market yourselves together. You could just put together a sort of "buying group" that will make it more cost-efficient for you and an agency to do business.

Working with other hotels and resorts in town may present some issues, but when you weigh the money each of you will save by working together against the challenge of sorting out a few issues, it’s certainly worth a think.

And, as we said, we’re open to it.

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The idea, after all, is to sell

If you want to sell something, get a salesman

 

For independent hotels and resorts, your website is one of your most important sales tools. Everything is geared toward driving traffic there.

And once that traffic arrives, your website has to do the heavy lifting of selling your property. So make sure somebody who knows how to sell is involved in putting it together.

Websites for global brands are produced, of course, by big in-house digital marketing groups and/or big outside web firms. For independent properties, it's usually your ad agency, a web firm, a design studio, your digital marketing firm, an individual in-house or somebody's cousin who is "pretty good with that stuff." Strengths and weaknesses all around.

But no matter how you go about building or updating your website, we'd suggest as strongly as we can and still be polite about it that you make sure your ad agency is involved. We're not saying your ad agency should necessarily do your website, just that they should be involved

(Note: "Digital marketing" firms and "ad-tech" firms aren't the same thing as a creative ad agency. Their focus is usually narrower and limited to search results – which is important, but not the same as creating a brand message that sells.

So there are two reasons we'd suggest involving your agency in your website:

For one thing, your agency usually is – or should be – the authority on your brand message. There are some very good digital firms out there that can build very good hospitality websites, but they aren't usually as focused on your brand message as your ad agency is. It's just not always part of their brief. Their attention is elsewhere. And probably should be.

The other thing is that, as we said, your website has to be a selling tool, and selling is what your ad agency does. It's their raison d être, if you want to get fancy about it. (And, apparently, we do.)

Your ad agency has been "in the trenches" fighting it out in the battle for market share for clients using whatever media channels and tools are best for the challenge. They're in that competitive fight every day, and know what it takes to win. And make no mistake about it, it's a fight.

With no disrespect to web design firms, digital marketing firms or the like, that's just not the sort of battlefield environment they are used to. These firms can – and will – build beautiful websites, but the fact is, they are usually more focused on how a website works, what it looks like or how it will play to the SEO computers than on delivering a powerful selling message.

Your website is not just a brochure on wheels. It should be one of your top selling tools. So make sure your ad agency is involved.

Because these people know how to sell.

 

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If you only had one tool . . .

People are starting to travel again.

 

And even groups are making noises. We’re not out of the woods yet, but we can see the clearing ahead.

And the competition is going to be stiff as hotels and resorts everywhere fight it out to make up that lost revenue. Which is the problem - “lost revenue.” As in “having the money to invest in advertising and marketing.”

Here's some good news. Having a clear Brand is not only the most powerful tool you can have, but also it's one of the most cost effective.

Just to be clear, your Brand is not your logo, stationery design or tag line. Nor is it your restaurant, luxury accommodations, ocean view or flexible meeting space. The guy next door probably has all that, too.

A brand is a supportable differentiation around which you deliver a unique value. And the moment you stop being just a hotel in the neighborhood and start to tell the world that you're somebody unique, you narrow your competitive set. Suddenly, you're not just another pretty face with packages and special offers.

There’s more. Your Brand:

. . . can give you a clear picture of your best target,

. . . so you can develop the smartest message for your marketing efforts,

. . . and put together the best offers and promotions for your that target,

. . . and focus on the best media channels to reach them,

. . . which means you can make the most efficient use of your marketing dollars.

It all starts with a clear Brand. So work it.

Read more about Brand here. And if you need help with yours . . . click here.

On budgets and budgeting

Oh boy

For many, it's budget and planning season, and nothing ruins a perfectly good Fall like having to plan next year's budget. Especially these days. 

But there’s pretty much no way around the fact that you’re going to do better with some sort of advertising and marketing. Which means you’re going to have to invest in it, and make no mistake, advertising and marketing are an investment. Business isn’t going to get better all by itself. 

We have a few thoughts that can help. 

Don’t start with a list of tactics. That's backwards. You'll almost always come up with more tactics than you can afford. In a way, you’re an architect, and an architect doesn’t start with the building materials. He or she starts with a vision. So start with what you want to accomplish. What are your goals for 2022? 

But at this point, think in terms of how you can differentiate yourself from the competition in order to achieve your goals. How can you create desire for your product or service that isn’t based on price? You may need some professional help with this. 

How much should you spend to get it done? Usually, advertising and marketing budgets are defined as a percentage of revenue, and that percentage can vary depending on who’s doing the defining and the circumstances of any particular business. Startups, for example, need to invest more now than they will as they get established.

The Small Business Administration recommends spending 7 to 8 percent of gross revenue for marketing and advertising for businesses doing less than $5 million a year in sales. We’ve seen recommendations as high as 20 to 25 percent for start-ups. The consensus seems to be around 7-10 percent. Of course the greater your revenue, the smaller the percentage to apply to marketing and advertising. In any case, we wouldn’t suggest going much below 5 percent.

This begs the question, should you base your budget on your current revenue or on your revenue goals? There are definitely cash-in-hand considerations, but we'd go with goals. You don't want to budget just to jog in place. 

One last thing. When it comes to actually delivering your message, stick to the media channels that will have the biggest impact. This, of course, requires a good understanding of your target audience, but don't try to do everything or be everywhere. The ROI isn't there. It's a lot better to do a few things well than to do a bunch of things halfway.

That kind of supports that don't-start-with-tactics thing, too.

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Eggs, baskets and digital avertising

Thoughts on digital advertising

Digital advertising is here to stay. It’s an important part of any company’s marketing communications mix and will be until the next marketing technology tool comes along. 

But before you dump all of your ad dollars into some form of digital media, it might be worthwhile reviewing a few facts and thoughts that come to us via Bob Hoffman’s new book, “Advertising For Skeptics.” (Available on Amazon.) 

One study showed that the eight kinds of advertising most disliked by consumers were all some form of digital advertising. Which could explain why between one and two billion computers, tablets and phones have ad blockers on them. 

In order to get five clicks, you have to run 10,000 ads – and 60 percent of those clicks are reported to be mistakes Only nine percent of digital ads are even noticed. 

This is a direct quote: “The idea that the same consumer who was gleefully clicking her remote to escape from TV ads is going to joyfully click her mouse to interact with online ads is going to go down as one of the great marketing fantasies of all time.” Think about it. 

With AdTech – as opposed to buying an online ad directly – you often don’t know where your ad may appear, except that the goal of AdTech is the most eyeballs on the cheapest websites possible. That could easily be on one of those “The Worst Plastic Surgery Mistakes Ever” sites. 

And this comes from the Wall Street Journal: In 2017, Proctor & Gamble cut more than $100 million from its digital marketing spend in the second quarter with little impact on its business.

Of course, new privacy requirements from Apple are going to hamper re-targeting strategies. A lot.

Drive business is the thing for hotels and resort right now. So outdoor, local and cable television, radio, local media outlets and direct digital buys on local or regional websites make a lot of sense. 

Digital advertising isn’t going anywhere and any hotel or resort that doesn’t employ it is making a mistake. But in light of these limitations, perhaps it makes sense to not put all of our budget eggs in that digital basket. 

Just some food for thought.

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At the taffy stand

On the boardwalk.

It's like walking down a boardwalk and finding your way to the salt-water taffy stand.  

What was it that got you there? Or what combination of things? The signage? The aroma as you went past? Someone you saw with a box? Maybe an ad or poster you saw?

Now you understand the concept of a journey map and full-path attribution.The journey map is that walk down the boardwalk. Full-path attribution is the combination of signage, scents and ads that created your desire for some taffy. Which is to say, it wasn't necessarily just the last thing you saw. 

This is how that your hotel or resort is like salt-water taffy: If you identify your targets' journey map and understand the different things that influence them along the way, you can make better use of your marketing dollars. Because it's not just the last thing a prospective guest saw that created their desire for your property. 

Which is to say, it wasn't necessarily just that last click. Even though digital channels will usually claim credit for the booking. 

In fact, a branded search - search for your property, not just properties in your neighborhood - has a far, far higher conversion rate then non-branded searches. And the parts of the journey map that can incite a branded search are what did the trick. 

In fact, it's never that simple.

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You can't out-Mick Mick

You can't out-Mick Mick Jagger.

The smart wannabe rocker won’t even try.

This applies, believe it or not, to the hospitality business as much as it does to rock and roll. That is to say, as the market starts to come back, an independent hotel would not do well trying to beat the chains on battlefields where they have an advantage. They will always have a bigger mailing list, a better rewards club, more name recognition and a bigger ad budget.

So beat them at something you can do that they can’t. Or can’t do very easily.

It’s probably not as hard – or expensive – as you think. Remember, the local arm of a big chain usually needs some approval from the mother ship for anything dramatic. You probably enjoy a bit more freedom. The average GM or DOM at an independent is much more empowered than their counterparts flying a national flag.

As an independent, you can re-jigger your brand to adapt to changing circumstances. And you can do it quickly. A chain isn’t going to adjust its brand without taking months to do it and spending more money than your entire marketing budget along the way. And an individual property won’t get away with going off-menu on their own.

Want to have a flash sale? You can have one tomorrow. Want to turn one of your suites into an Elvis Suite? Do it. Reposition mid-week downtime to something special and create demand. Show movies in the pool and give everybody an inner tube to float around in. Go for it.

Distinguish yourself.

And there's this: As an independent, you are almost certainly more a part of the local fabric than the local outpost of an out-of-town corporation. Work it. Build your local business for your F&B outlets while you wait for distance travel to loosen up. Develop partnerships with local businesses.

The point is, for all the advantages they have, there are limitations that go along with being part of a chain. You’re more likely to hear “Oh, we could never do that” in the executive offices of a local flag property than in the GM’s office of an independent. You probably can "do that."

It would probably be a good idea to get some help with this, too. From people who do this sort of thinking for a living. People who think and see things differently than you do. People who tend to ask “why not?” a lot. Fresh eyes and ideas and all that. No disrespect intended here, but this is not really the sort of thing your web firm or whomever handles your AdWords placements is built to do. This is a whole other thing.

This is about strategic creativity. And in the months and years ahead, creativity and innovation are going to win the day. This is where, as an independent, you've got a competitive edge.

Because there is only one Mick Jagger.

And if you want to be a bit more upscale about it, there's always Oscar Wilde: "Be yourself. Everyone else is taken." 

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