Data First! – Health Check in the Digital AgeBy Michael Toedt - Managing Partner and CEO at TS&C GmbH
Data First! – Health Check in the Digital Age | By Michael Toedt
The success formula in marketing is quite simple: The further the reach, the better the results. For direct marketing this translates to: The larger the target group, the more bookings can be generated through a hotel's proprietary website.
How to reach up to 100,000 prospective customers
"Data First" should be the key maxim for marketing! Thus, the main focus should be on collecting as much data as possible from existing and prospective customers to be able to use them for marketing purposes. In the digital age, the creation of marketing campaigns has become very simple. The costs for dispatch – once the limiting factor in customer relationship management – are no longer relevant. With an investment of only € 1,000, it is possible to reach up to 100,000 contacts. The cost per thousand contacts has always been a key indicator. These costs have decreased significantly for e-mail marketing.
Do you know the marketing potential of your hotel?
What is the number of guests a hotel should be able to communicate with in the Big Data era? Here an example: A 100-room hotel with an average occupancy of 80%, an average length of stay of 1.5 days, a double-occupancy factor of 25%, as well as 5,000 external conference guests, should be able generate approx. 25,000 guest profiles per year. In less than five years, this hotel should be able to communicate with more than 100,000 guests, despite considering a loyalty factor of 20%.
This number is much lower in most hotels, which means that there is unleveraged revenue potential. The booking rate for an average newsletter to existing clients is about 0.25%. One single e-mail campaign to 100,000 contacts, has a revenue potential of more than € 60,000, calculating with an average revenue of € 250 per booking. With our dailypoint™ software you can precisely measure the success of each marketing campaign. With the right strategy, you can collect the full contact details of about 85% of your guests, including daytime visitors and partners. Any business, which fails to achieve this, should start taking action.
Are you ready for theDigital Age?
Managers should analyze their company's fitness for the digital age. The basis for all measures is the contact database and the number of profiles, which can be used for marketing measures. If less than 85% of the profiles are usable, the company has some deficits. These can exist for legal, technical or organizational reasons. But since acquisition of new clients is up to 10 times more costly than managing existing clients, there is a negative impact on the marketing expense.
New company valuation models are being introduced that also evaluate the number of available client profiles. So far, these models are not applied for the hospitality industry, as the importance of digitalization in this industry is not yet understood. But this will definitely change over the next couple of years. Hoteliers should be prepared and put a focus on their digitalization strategy. Not design or content play the main role in marketing, but the data collection.
Dr. Michael Toedt is the founder and CEO of Toedt, Dr. Selk & Coll. GmbH, a leading Big Data Marketing and CRM company. Operating at the intersection of business and technology, he helps hoteliers with the software dailypoint™ to use the tremendous increase of data in order to become data-centric. Dr. Toedt has over 25 years of experience in operations, technology and marketing. He is the author of several books (among others “Big Data – Challenges for the Hospitality Industry” (2013) and “Data Revolution – How Big Data Will Change the Way of Doing Business” (2014) and his articles are published by journals on a regular basis. Dr. Toedt holds a doctoral degree in management science. He is assistant lecturer at the University of Applied Sciences of Munich for the subject “Customer Relationship Management in Tourism” and as guest lecturer at various universities such as the University of Applied Sciences of Bad Honnef, Kempten or NDS Hôtelleriesuisse. In the past, Dr. Toedt was regional vice president of SANSORA INTERNATIONAL, a subsidiary company of the Schoerghuber corporate group and accompanied many hotel associations during the production of their central customer and marketing data base. He was raised in his parents’ hotel and after completing a mercantile apprenticeship he graduated as cook to be employed in the 5-stars restaurant Hotel Koenigshof in Munich. 1995 he began his business economics studies at the University of Applied Sciences in Munich. During this time he visited the Cornell University, NY and is now President of the German Chapter.
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