21 Nov 2011

Achieving Social Media ROI for the Hospitality Industry

The buzz surrounding social media marketing hasn't gone unnoticed by the hotel industry and hoteliers are seeking to make inroads by engaging with the leading social networks in new and innovative ways.

While hoteliers now include Facebook and Twitter share buttons on their websites and have become more familiar with the return on engagement (ROE) tools available today, the ability to convert these fans and followers into customers generating actual room reservations is still an elusive goal for many.

Consequently, they continue to search for marketing services that can truly measure success and garner a lucrative return on investment (ROI).
Social Media on the Rise

Worldwide social media revenues are expected to rise to more than $10 billion in 2012, reflecting a 41.4 percent rise from 2010, according to research company Gartner.

"Marketers will begin to transition from 'onetime placement and click of ads' toward 'ongoing engagement' with the Internet user and will therefore allocate a higher percentage of their advertising budget to social networking sites," said Neha Gupta, senior research analyst at Gartner.

"This is mainly because social networking sites, with the help of social analytics firms, are able to unlock the interconnected data structures of users - mapping lists of friends, their comments and messages, photos and all their social connections, contact information and associated media."

Another report by global consulting company McKinsey concluded that companies needed to take a relook at the entire business model in order to succeed in the digital space. According to McKinsey, this will involve establishing new structures, metrics and processes to ensure that marketing and sales are adequately linked with all the areas of the business that could contribute to the company's ability to understand and engage with consumers.

Hotels on the Sidelines

Hotels have watched this trend with growing interest. While boutique hotels were the early adopters of social media marketing, the majority of larger hotel chains were more cautious in moving from traditional to digital marketing. That, however, seems to be changing. A recent poll conducted by TravelClick indicates that hotels are significantly increasing 2012 marketing budgets for social campaigns.

The study shows that half of the hotels surveyed plan to invest more marketing dollars in their mobile websites and social marketing. These hotels are utilizing these new digital tools to approach potential customers in a more personalized manner in order to boost loyalty programs, improve customer service and, most importantly, to increase bookings.

And while this is a move in the right direction, it's apparent that hotels are still unclear as to how to measure online activities and, more importantly, how to convert their customers' online engagement into revenue.

Engage with your guests

With social media as the distribution channel, today's hoteliers require a comprehensive marketing plan that will permit them to adapt and broaden their communication channels to align with guests changing interests and preferences. It's been proven that brands which communicate with their visitors and motivate them to share their vacation plans with their friends and followers are the most successful. In essence, hoteliers are learning how to make their customers their most engaged advocates.

Many hotels are unaware of the new marketing platforms that convert both existing guests and website visitors into becoming an extension of a brand's marketing force. These new tools extend the hotel's advertising reach by tapping into the guest's social network communities. This subsequent circle of influence not only increases the numbers of potential new guests, but it also vets the brand messaging because it's coming from the trusted source of a guest's friends and followers.

For instance, automated systems which can integrate with a hotel's booking engine can now offer hoteliers and guests a streamlined means of disseminating brand messaging during the reservation process. Termed "magnetic marketing," the time of purchase is an optimal point of engagement when the hotelier has the undivided attention of its booking guest. This paradigm is based on the premise that the strength of the bond between seller and buyer is the greatest when both are traversing the "same wave length."

Additionally, booking engine integrations provide an opportunity for guests to spread the word about their upcoming stay by incentivizing them with offers such as a "guest room upgrade."

This level of engagement is far greater than traditional marketing and has translated into measurable returns in just about every metric (i.e., posts, impressions, shares, reach, sign-ups), and now even booked room nights. While the "push advertising" of the past might have been able to produce a 1-3% return at best, today these more robust services can garner 15-25% ROE and an astonishing 10X or better ROI.

Hotels that wish to gain from the benefits of social media marketing should first explore what the market has to offer and then draft a marketing strategy that has clear goals and well-defined targets that can yield a significant ROI which is both trackable and scalable.

Original article: Hospitalitynet