Welcome to the first Friday Freebie of 2019!
For more than three years we have shared one impactful hotel marketing tactic every Friday that hotel marketers can implement immediately to drive conversions and revenue.
This week’s Freebie: Determine the single most important metric by which you will be judged this coming year by management/ownership, then align your actions and energy around it.
As hotel marketers, we have dozens of metrics to deal with…. but we humbly suggest there’s one that should matter more than any other. The One Metric That Matters (OMTM) is a powerful concept derived from a renowned thought leader in Silicon Valley. But the idea transcends every industry and is especially important for serious-minded hotel marketers.
We fully recognize that the OMTM may be different depending on your property’s needs, your career stage or your personal comp plan. It may change as your property evolves and other goals are met… And the OMTM doesn’t give you a hall pass to ignore other responsibilities or to stop monitoring other KPIs.
But adhering to OMTM can be a “north star” that guides you to success in the often confusing and complex hotel marketing landscape.
Why it’s important to know your OMTM
1. It answers the most important question you have
What is your marketing cost by channel?
What is my ratio of direct revenue vs OTAs?
What is my direct website conversion rate?
Is my loyalty program growing?
The OMTM is responsible and necessary for measuring and answering the most burning question in your purview.
2. It focuses you
The One Metric That Matters will force you to set realistic targets and analyze your results honestly and transparently. Let’s say your OMTM is increasing the number of NEW members in your hotel brand loyalty program…you’ll need to set a realistic target for the number of new members you hope to gain this year and ensure you have the resources and budget to achieve that target.
3. It focuses your team
According to Patel: “Focus is good. In fact, it’s better to run the risk of over-focusing (and missing some secondary metric) than it is to throw metrics at the wall and hope one sticks…” By rallying everyone on the hotel marketing team around the OMTM, there should be no surprises when it’s time to review performance vs budget (or employee reviews).
4. It inspires innovation
Knowing your OMTM and achieving it are clearly two different things. If your OMTM is relevant and truly meaningful, it will surely take hard work and innovation to achieve it. Inherently, the reason your OMTM exists is because it MATTERS more than any other. And if matters that much, its’ not going to be easy to conquer.
OMTMs for consideration:
In our experience working with some of the most successful hotel marketing firms in the world, we have seen many OMTMs, including:
- MCPB (marketing cost per booking): Tracks the cost of each sales and marketing channel versus actual conversions. Try using this for OTA commissions as well… and see how that channel stacks up versus your other campaigns.
- DRR (direct revenue ratio): Measures percentage of online revenue from direct sources (your website) versus pricey third-party sources, like OTAs. If you’re not garnering 40 percent of your revenue from direct reservations, you still have work to do!
- Website conversion rate (from unique visitor to entrances into the booking environment): Converting a higher percentage of visitors into booking searches (or phone calls) is critical to reducing your cost of revenue and MCPB.
- Variance from revenue target: This metric showcases revenue goals versus actual results (by segment).
- TripAdvisor sentiment score: Using a reputation/sentiment monitoring tool allows hotels to measure guest satisfaction. This reflects whether your guests are enjoying your product, along with alerting you to hotel deficiencies. A bad hotel experience will outweigh any of your clever sales and marketing tactics.
Tambourine uses technology and creativity to increase revenue for hotels and destinations worldwide. The firm, now in its 34th year, is located in New York City and Fort Lauderdale.
Please visit: www.Tambourine.com